Salary & Income
Tax Deductions Explained: What You Can Deduct in 2025
Tax deductions lower the amount of your income that gets taxed, which can cut your federal tax bill. Every filer chooses between the standard deduction and itemizing their deductions — whichever is bigger usually wins. This guide explains tax deductions in simple terms for the 2025 tax year, lists the most common ones and shows a worked example. You can then estimate your federal tax with our [tax calculator](/calculators/tax-calculator).
By the MoneyTools Editorial TeamLast updated 8 min readEditorial Policy
What a tax deduction is
A tax deduction is an amount you subtract from your income before tax is calculated. If you earn $80,000 and have $15,750 of deductions, you are taxed on $64,250 instead. The money you save equals the deduction times your tax rate on that slice of income — so a $1,000 deduction saves about $220 for someone in the 22% bracket.
Standard deduction vs itemizing in 2025
You can take a flat standard deduction or list (itemize) your actual deductible expenses. You pick one, not both. These are the 2025 federal standard deduction amounts, as updated by the 2025 tax law:
| Filing status | 2025 standard deduction |
|---|---|
| Single | $15,750 |
| Married filing separately | $15,750 |
| Head of household | $23,625 |
| Married filing jointly | $31,500 |
Most households take the standard deduction because it is larger than their itemized total. Itemizing tends to pay off for people with a large mortgage, high state and local taxes, or big charitable gifts.
The most common tax deductions
Mortgage interest
Interest on a mortgage for your main or second home is deductible if you itemize, within IRS loan limits.
State and local taxes (SALT)
State income or sales tax plus property tax can be deducted when you itemize, up to a yearly cap set by law.
Charitable giving
Donations to qualified charities are deductible when you itemize. Keep receipts and records.
Student loan interest
You may deduct up to $2,500 of student loan interest even if you take the standard deduction, subject to income limits. This is an "above-the-line" deduction.
Contributions to a traditional 401(k) or deductible IRA also lower taxable income without itemizing.
Tax deductions worked example: $80,000 income
Worked example
Standard vs itemized deduction
- Single filer, $80,000 income
- Standard deduction: $15,750 → taxable income $64,250
- Itemized deductions (mortgage interest, property tax, charity): $19,000 → taxable income $61,000
- Extra deduction from itemizing: $19,000 − $15,750 = $3,250
- Tax saved at the 22% bracket: $3,250 × 22% ≈ $715
Itemizing saves about $715 in federal income tax in this example.
| Standard deduction | Itemized | |
|---|---|---|
| Income | $80,000 | $80,000 |
| Deduction | $15,750 | $19,000 |
| Taxable income | $64,250 | $61,000 |
| Extra tax saved | — | ≈ $715 |
Estimate your tax and take-home pay
Estimate your 2025 federal income tax with the tax calculator, see your paycheck in the Take-Home Pay Calculator, or the Salary Calculator to convert pay between periods. For official rules and your situation, check IRS.gov or a tax professional.
Run your own numbers
Estimate 2025 federal income tax by filing status, with standard deduction, brackets and effective rate.
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