A retired couple in Phoenix just had their first $46,700 of income wiped off their tax bill. Not through some clever loophole. Not through a pricey CPA. Through the standard deduction, a handful of age-related add-ons, and a brand-new provision most people haven't heard of yet.
That number ($46,700) would have been impossible without the One Big Beautiful Bill Act, signed on July 4, 2025. If you're filing your 2025 return this season, the standard deduction is almost certainly the single biggest line item shielding your income from tax. Here's exactly how much it's worth, who qualifies for extra, and when you should skip it entirely.
30-Second Summary: The 2025 standard deduction is $15,750 (single), $31,500 (married filing jointly), or $23,625 (head of household). A new $6,000 senior bonus stacks on top for filers 65+. The SALT cap rose to $40,000, making itemizing worthwhile for more homeowners. And if you're self-employed, you get both business deductions and the standard deduction. They're not either/or.
2025 Standard Deduction Amounts
The IRS adjusts these numbers annually for inflation. For tax year 2025, here's where things landed [1]:
| Filing Status | 2024 Amount | 2025 Amount | Change |
|---|
| Single | $14,600 | $15,750 | +$1,150 |
| Married Filing Jointly | $29,200 | $31,500 | +$2,300 |
| Head of Household | $21,900 | $23,625 | +$1,725 |
| Married Filing Separately | $14,600 | $15,750 | +$1,150 |
That's a meaningful bump. A single filer earning $55,000 just had $1,150 more of their income shielded from federal tax compared to last year. At the 12% bracket, that's roughly $138 back in your pocket without changing a thing about how you file.
The standard deduction is a flat amount the IRS subtracts from your income before calculating what you owe. About 90% of filers take it instead of itemizing, and the 2025 numbers make that decision even easier for most people [7].
If you're curious how these amounts connect to your W-2 income or 1099 earnings, those articles walk through the specific forms. The standard deduction applies the same way regardless of how your income arrives.
The New Senior Bonus Deduction (OBBBA)
This is the headline change for 2025.
Before the OBBBA, filers aged 65 or older already got a "regular" addition to their standard deduction: $2,000 if single or head of household, $1,600 per qualifying person if married [6]. That still exists.
What's new: the OBBBA added a $6,000 senior bonus deduction on top of everything else [2]. It's available per eligible individual, so a married couple where both spouses are 65+ gets $12,000 in bonus deductions. The provision runs from 2025 through 2028.
There's a catch.
Income phaseouts kick in at $75,000 for single filers and $150,000 for joint filers [4]. Above those thresholds, the bonus shrinks and eventually disappears. The reduction is roughly 6% per dollar over the limit.
Here's what the full stack looks like for seniors in 2025:
| Component | Single (65+) | Married Filing Jointly (Both 65+) |
|---|
| Base Standard Deduction | $15,750 | $31,500 |
| Regular Age 65+ Add-on | $2,000 | $3,200 ($1,600 × 2) |
| OBBBA Senior Bonus | $6,000 | $12,000 ($6,000 × 2) |
| Total | $23,750 | $46,700 |
For a deeper breakdown of the regular age-related additions (including rules for blind filers), see our guide to the extra standard deduction for filers 65 and older.
That $46,700 for a married couple is striking. A retired couple living on $110,000 of pension and Social Security income would only pay federal tax on roughly $63,300 of it. That's real money, and it's entirely new territory.
The bonus is technically an "above-the-line" deduction, which means it reduces your adjusted gross income (AGI). That's unusual for something connected to the standard deduction, and it can have cascading benefits since many credits and phaseouts depend on AGI. Life rarely hands you compounding tax breaks, but this is one of those moments.
Standard vs. Itemized: The 2025 Decision
The core question hasn't changed: do your itemizable expenses add up to more than your standard deduction? If yes, itemize. If no, take the standard.
What has changed is the math on both sides.
The New $40,000 SALT Cap
For years, the $10,000 cap on state and local tax (SALT) deductions made itemizing nearly impossible for many filers. You could pay $18,000 in state income tax and property tax combined but only deduct ten thousand of it.
Starting in 2025, the cap jumped to $40,000 ($20,000 for married filing separately) [5]. That single change swings the calculation for homeowners in high-tax states like New York, California, New Jersey, and Connecticut. Property taxes alone in parts of Long Island run $12k to $15k. Add state income tax and you could easily clear $20,000 in SALT, all of which is now deductible.
I'll be honest: if you own a home in a high-tax state and haven't re-run the itemize-vs-standard math since the SALT cap changed, you might be leaving real money on the table.
The Itemize-or-Not Checklist
Run through these numbers. If your total exceeds your standard deduction amount, you should itemize.
- Mortgage interest (on loans up to $750,000)
- State and local taxes (income or sales tax + property tax, capped at $40,000)
- Charitable donations (cash gifts up to 60% of AGI; see our charitable donation deduction guide)
- Medical expenses exceeding 7.5% of your AGI (our medical expense deduction guide covers the threshold rules)
- Casualty losses from federally declared disasters
If you're on the fence, the standard deduction vs. itemized deductions comparison walks through the full trade-offs. But for most filers without a mortgage or significant SALT exposure, the standard deduction wins easily at these 2025 levels.
Three Worked Examples
Example 1: Dani, 29, Single W-2 Employee
Dani earns $58,000 at a marketing agency in Austin, Texas. No mortgage (she rents). She donated $400 to her college alumni fund and paid $3,200 in state and local taxes.
Itemized total: $3,600 ($3,200 SALT + $400 charity)
Standard deduction: $15,750
The standard deduction is more than four times her itemizable expenses. Not even close.
Dani's taxable income: $58,000 − $15,750 = $42,250
She doesn't need to track receipts, fill out Schedule A, or think twice. The standard deduction is the obvious play here, and it is for most single renters. If Dani wants to file her taxes for free, she qualifies for IRS Free File at that income level.
Example 2: Marco and Lisa, Both 66, Married Filing Jointly
Marco and Lisa are retired in Scottsdale. Marco collects a $62,000 pension. Lisa receives $28,000 in Social Security. Their combined income: $90,000 (well below the $150,000 phaseout threshold for the senior bonus).
They rent, so no mortgage interest. Their itemizable expenses are minimal.
Their 2025 standard deduction stack:
| Layer | Amount |
|---|
| Base standard deduction | $31,500 |
| Regular age 65+ add-on (× 2) | $3,200 |
| OBBBA senior bonus (× 2) | $12,000 |
| Total deduction | $46,700 |
Taxable income: $90,000 − $46,700 = $43,300
Without the new OBBBA bonus, their 2025 deduction would only be $34,700. The new law saves them tax on an extra $12,000 of income. At the 12% bracket, that's $1,440 they keep.
A couple pulling in ninety grand and paying federal tax on only $43,300 of it? That's the power of stacking. (And if their income were higher, say $170,000, the bonus would phase down. Tax breaks always come with asterisks.)
Example 3: Priya, 34, Freelance Graphic Designer (1099/Schedule C)
This example clears up the most common misconception we hear from self-employed readers.
Priya earns $72,000 in gross freelance revenue. She claims $12,000 in business expenses on Schedule C: software subscriptions (Adobe Creative Cloud isn't cheap), a home office deduction, a new monitor, and cloud storage.
She rents an apartment in Denver. No mortgage. Minimal itemizable expenses.
Here's the key: her business expenses and the standard deduction live on different floors of the tax return.
- Gross income: $72,000
- Schedule C business expenses (above the line): −$12,000
- Adjusted Gross Income: $60,000
- Standard deduction (below the line): −$15,750
- Taxable income: $44,250
Priya gets both. The $12,000 in small business deductions reduces her AGI. Then the standard deduction reduces her taxable income further. They stack, not compete. This trips up a lot of freelancers who assume they have to choose.
She'll still owe self-employment tax (15.3% on net earnings), but her income tax bill is based on that $44,250 figure.
Dependent Standard Deduction Rules
If someone else claims you as a dependent (common for teenagers with part-time jobs or college students), you don't get the full standard deduction. Instead, your standard deduction is the greater of [7]:
- $1,350, or
- Your earned income + $450 (up to the normal standard deduction amount)
So if your 17-year-old earned $4,800 working at a coffee shop, their standard deduction is $4,800 + $450 = $5,250. They'd owe no federal income tax on those wages.
If that same teen had $800 in earned income, their deduction would be $1,350 (since $800 + $450 = $1,250, which is less than the $1,350 floor).
Unearned income (investment gains, interest) is a different story. Dependents with more than $1,350 in unearned income may owe tax under the "kiddie tax" rules [6]. Dependent taxation is one of those areas where the edge cases multiply fast, so double-check the specifics if your kid has a brokerage account or significant savings interest.
Looking Ahead: 2026 Numbers
The IRS has already released projected 2026 standard deduction amounts: $16,100 for single filers and $32,200 for married filing jointly [3]. Another modest inflation bump. The OBBBA senior bonus is still active through 2028, so seniors will continue stacking for at least three more tax years.
For a historical perspective on how these amounts have evolved, our standard deduction amounts reference page tracks the numbers going back several years.
Your Next Move
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Check your filing status. The difference between single ($15,750) and head of household ($23,625) is nearly eight thousand dollars. If you maintained a home for a qualifying dependent for more than half the year, HOH might be available to you. That's thousands in tax savings from a single checkbox.
-
Run the itemize-or-standard math. Add up mortgage interest + SALT (up to $40k) + charitable donations + medical expenses over 7.5% of AGI. If the total beats your standard deduction, itemize using Schedule A. If not, take the standard. Five minutes with a calculator can confirm this.
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If you're 65+, verify your income against the phaseout. The $6,000 bonus is only fully available below $75,000 (single) or $150,000 (joint). If you're close to those thresholds, consider timing income (like Roth conversions or capital gains) to stay under the line.
-
Self-employed? Take both. File your Schedule C for business expenses and claim the standard deduction for personal. Don't leave money on the table thinking it's one or the other.
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Missed something on a prior return? If you claimed the standard deduction last year but should have itemized (or vice versa), you can fix it with an amended return. You have three years from the original filing date.
And if you need more time to sort all this out, our guide to filing a tax extension explains how to buy yourself until October 15 without penalties on the amount you've already paid.
Frequently Asked Questions
Can I claim the $6,000 senior bonus if I take the standard deduction?
Yes. The OBBBA senior bonus deduction is designed to stack on top of your standard deduction and the regular age 65+ addition. You don't need to itemize to claim it. The only requirement is being 65 or older with income below the phaseout threshold ($75,000 single / $150,000 joint) [2][4].
Did the SALT cap really change for 2025?
It did. The state and local tax deduction cap increased from $10,000 to $40,000 ($20,000 if married filing separately), effective for tax years 2025 through 2029 [5]. For homeowners in high-tax states, this is the change most likely to tip the standard-vs-itemized decision toward itemizing.
How does the standard deduction work for dependents?
A dependent's standard deduction is the greater of $1,350 or their earned income plus $450, capped at the normal standard deduction amount ($15,750 for 2025). A dependent with $6,000 in W-2 wages gets a $6,450 standard deduction. A dependent with no earned income gets only $1,350 [7].
I'm self-employed. Do I have to choose between business expenses and the standard deduction?
No. This is one of the most common misunderstandings in tax filing. Business expenses go on Schedule C and reduce your adjusted gross income. The standard deduction then reduces your taxable income further. You get both. Our Schedule C guide walks through the mechanics.
What's the standard deduction for 2026?
The IRS projects $16,100 for single filers and $32,200 for married filing jointly in 2026 [3]. The OBBBA senior bonus remains in effect through 2028.
References
- Internal Revenue Service. (2024). Revenue Procedure 2024-40. IRS.gov. https://www.irs.gov/irb/2024-44_IRB#REV-PROC-2024-40
- Internal Revenue Service. (2025). Fact Sheet 2025-03: One Big Beautiful Bill Act Tax Deductions. IRS.gov. https://www.irs.gov/newsroom
- Internal Revenue Service. (2025). Revenue Procedure 2025-32. IRS.gov. https://www.irs.gov/irb/2025-35_IRB#REV-PROC-2025-32
- TaxAct. (2026). Changes for 2025 Tax Year. TaxAct.com.
- Liberty Tax. (2025). SALT Cap Raised to $40,000. LibertyTax.com.
- Kiplinger. (2026). What's the Standard Deduction for 2025 and 2026? Kiplinger.com. https://www.kiplinger.com/taxes/tax-deductions/602223/standard-deduction
- NerdWallet. (2026). Standard Deduction 2025-2026. NerdWallet.com. https://www.nerdwallet.com/article/taxes/standard-deduction
