Deductions Demystified

A tax deduction lowers your taxable income. Earn $75,000 with $12,000 in deductions, and you're taxed on $63,000.

You pick one of two paths:

• Standard deduction: a flat amount ($15,750 for single filers in 2025)
• Itemizing: adding up specific costs like mortgage interest, state taxes, and charitable gifts

Most people take the standard deduction because it beats their itemized total. Itemize only when your deductible costs add up to more.