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Credits and Deductions

You can claim credits and deductions when you file your tax return to lower your tax. Make sure you get all the credits and deductions you qualify for. If you have qualified dependents, you may be eligible for certain credits and deductions.
A credit is an amount you subtract from the tax you owe. This can lower your tax payment or increase your refund. Some credits are refundable — they can give you money back even if you don't owe any tax. 


Credits and deductions for individuals​

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Here are credits you can claim:

  • If you earn under a certain income level 

  • If you’re a parent or caretaker

  • If you pay for higher education

  • If you put money into retirement savings

  • If you invest in clean vehicles or clean home energy

  • If you buy health insurance in the marketplace

  • If you qualify for other personal tax credits

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Take deductions 
A deduction is an amount you subtract from your income when you file so you don’t pay tax on it. By lowering your income, deductions lower your tax. 

You need documents to show expenses or losses you want to deduct. Your tax software will calculate deductions for you and enter them in the right forms. If you file a paper return, your deductions go on Form 1040 and may require extra forms. 

Standard vs. itemized deductions 
Most people take the standard deduction, which lets you subtract a set amount from your income based on your filing status. 

If your deductible expenses and losses are more than the standard deduction, you can save money by deducting them one-by-one from your income (itemizing). Tax software can walk you through your expenses and losses to show the option that gives you the lowest tax. 

Some people, including nonresidents and partial-year filers, can’t take the standard deduction. 

 

​Standard deduction amounts 

The standard deduction for 2023 is: 

$13,850 for single or married filing separately 

$27,700 for married couples filing jointly or qualifying surviving spouse 

$20,800 for head of household 

Find the standard deduction if you’re: 

Over 65 or blind

A dependent on someone else’s tax return

If you’re married filing separately, you can’t take the standard deduction if your spouse itemizes. You must both choose the same method.

 

You can deduct these expenses whether you take the standard deduction or itemize:

  • Alimony payments 

  • Business use of your car 

  • Business use of your home 

  • Money you put in an IRA 

  • Money you put in health savings accounts 

  • Penalties on early withdrawals from savings 

  • Student loan interest 

  • Teacher expenses 

  • For some military, government, self-employed and people with disabilities: work-related education expenses 

  • For military servicemembers: moving expenses 

  • If you itemize, you can deduct these expenses:

  • Bad debts 

  • Canceled debt on home 

  • Capital losses 

  • Donations to charity 

  • Gains from sale of your home 

  • Gambling losses 

  • Home mortgage interest 

  • Income, sales, real estate and personal property taxes 

  • Losses from disasters and theft 

  • Medical and dental expenses over 7.5% of your adjusted gross income 

  • Miscellaneous itemized deductions 

  • Opportunity zone investment 

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Get answers to questions on itemized deductions and the standard deduction

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