The IRS offers two major options for lowering your taxable income. The "standard deduction" and "itemized deductions".
The standard deduction is a fixed amount that you can deduct from your income to reduce how much is taxed. You can take the standard deduction without having to prove anything. Last year, over 97% of taxpayers used the standard deduction in computing their tax. The standard deduction is a flat amount that is allowed even though the individual has not necessarily paid such amount. For 2026, the standard deduction is a whopping $32,200 for married couples ($35,500 if both 65 or over) filing a joint return. And, for 2026 only, a "bonus" $6,000 per taxpayer can be added to that standard deduction (provided certain income thresholds are met).
Itemized deductions include, but are not limited to, items such as medical expenses (only those greater than 7 1/2% of your adjusted gross income are allowed), state, local & real estate taxes, known as SALT (some limitations), mortgage interest (can be reduced depending on mortgage amount), and qualified charitible contributions. With the increase in the 2026 SALT deduction some taxpayers may find that their 2026 itemized deductions are greater than the 2026 standard deduction.
