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7.1 Standard Deduction by Filing Status

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1 Part 1, Chapter 1: Tax Return Basics & Filing Requirements

1.1 Form 1040 Overview & Structure 1.2 Form 1040-SR for Seniors 1.3 Who Must File (Income Thresholds) 1.4 Filing Deadlines & Extensions (Form 4868) 1.5 Penalties: Failure to File vs. Failure to Pay 1.6 Sources of Tax Information (W-2s, 1099s, K-1s) 1.7 Preparer Due Diligence Requirements 1.8 Amended Returns (Form 1040-X)

2 Part 1, Chapter 2: Filing Status & Dependents

2.1 Single & Married Filing Jointly 2.2 Married Filing Separately 2.3 Head of Household Requirements 2.4 Qualifying Surviving Spouse 2.5 Qualifying Child Test (5 Tests) 2.6 Qualifying Relative Test (4 Tests) 2.7 SSN, ITIN & Residency Status

3 Part 1, Chapter 3: Wages & Employee Compensation

3.1 W-2 Income & Withholding 3.2 Employee vs. Independent Contractor 3.3 1099-NEC, 1099-MISC & 1099-K Reporting 3.4 Fringe Benefits (Taxable vs. Non-Taxable) 3.5 Stock Options (ISO vs. NQSO) 3.6 Special Categories (Clergy, Military, Foreign)

4 Part 1, Chapter 4: Interest, Dividends & Other Income

4.1 Taxable vs. Tax-Exempt Interest 4.2 US Savings Bonds & OID 4.3 Ordinary vs. Qualified Dividends 4.4 Schedule B Requirements 4.5 Rental & Royalty Income Basics 4.6 Alimony, Gambling & Other Income 4.7 Cancelled Debt & Form 1099-C 4.8 Net Operating Loss (NOL)

5 Part 1, Chapter 5: Capital Gains & Property Transactions

5.1 Capital vs. Non-Capital Assets 5.2 Cost Basis Calculation 5.3 Inherited & Gifted Property Basis 5.4 Short-Term vs. Long-Term Gains 5.5 Capital Gains Tax Rates (0%, 15%, 20%) 5.6 Netting & the $3,000 Loss Limit 5.7 Wash Sales & Related Party Rules 5.8 Sale of Primary Residence (Section 121) 5.9 Installment Sales (Form 6252) 5.10 Like-Kind Exchanges (Section 1031)

6 Part 1, Chapter 6: Adjustments to Income

6.1 Educator Expenses & HSA Contributions 6.2 Self-Employment Tax Deduction 6.3 IRA Contributions (Traditional) 6.4 Student Loan Interest Deduction 6.5 Alimony Paid (Pre-2019 Divorces) 6.6 Other Adjustments & New OBBBA Deductions (Tips, Overtime, Auto Loan, Senior Bonus)

7 Part 1, Chapter 7: Deductions (Standard & Itemized)

7.1 Standard Deduction by Filing Status 7.2 Medical & Dental Expenses (7.5% Floor) 7.3 State & Local Taxes (SALT $40K Cap) 7.4 Mortgage Interest Deduction 7.5 Charitable Contributions 7.6 Casualty & Theft Losses 7.7 QBI Deduction (Section 199A)

8 Part 1, Chapter 8: Tax Calculation & Credits

8.1 Tax Tables & Rate Schedules 8.2 Alternative Minimum Tax (AMT) 8.3 Self-Employment Tax Calculation 8.4 Child Tax Credit & Additional CTC 8.5 Earned Income Tax Credit (EITC) 8.6 Education Credits (AOC & LLC) 8.7 Child & Dependent Care Credit 8.8 Other Credits (Saver's, Premium Tax)

9 Part 1, Chapter 9: Retirement Accounts & Social Security

9.1 Traditional vs. Roth IRA 9.2 401(k), 403(b) & TSP Basics 9.3 SEP-IRA & SIMPLE IRA 9.4 Required Minimum Distributions (RMDs) 9.5 Early Withdrawal Penalties & Exceptions 9.6 Social Security Taxation

10 Part 1, Chapter 10: Specialized Individual Returns

10.1 Estate Tax (Form 706) 10.2 Gift Tax (Form 709) 10.3 Foreign Income (Form 2555) 10.4 FBAR & FATCA Reporting 10.5 Farm Income (Schedule F) 10.6 Disaster Area Rules

11 Part 2, Chapter 11: Business Entity Types

11.1 Overview of Entity Types 11.2 State Law vs. Tax Classification 11.3 Entity Selection: Reasonable Comp & QBI 11.4 Form 8832 & Rev. Proc. 2009-41 11.5 LLC Deep Dive: Spouses & EINs 11.6 Changing Status: The 60-Month Rule

12 Part 2, Chapter 12: Starting a Business

12.1 Hobby vs. Business (Profit Motive) 12.2 Employer Identification Number (EIN) 12.3 Tax Year Selection 12.4 Recordkeeping Requirements 12.5 Statute of Limitations 12.6 Related Party Transactions 12.7 Start-Up Costs, Entity Choice & OBBBA Business Changes (2025)

13 Part 2, Chapter 13: Worker Classification & Payroll

13.1 Employee vs. Independent Contractor 13.2 Common Law Test (Behavioral, Financial, Relationship) 13.3 Statutory Employees & Non-Employees 13.4 Form 941 & Payroll Deposits 13.5 Trust Fund Recovery Penalty 13.6 FUTA & Unemployment Taxes

14 Part 2, Chapter 14: Accounting Methods & Income

14.1 Cash vs. Accrual Method 14.2 Hybrid Methods & Changes 14.3 Inventory & COGS 14.4 Gross Receipts & Income Recognition 14.5 Constructive Receipt 14.6 Form 1099 Reporting Requirements 14.7 §163(j) Business Interest Expense Limitation 14.8 §174 Research & Experimental Expenditures

15 Part 2, Chapter 15: Depreciation & Asset Treatment

15.1 MACRS Basics & Recovery Periods 15.2 Mid-Month, Mid-Quarter, Half-Year Conventions 15.3 Section 179 Expense Deduction 15.4 Bonus Depreciation 15.5 Listed Property Rules 15.6 Amortization of Intangibles 15.7 Depletion 15.8 Disposition of Business Assets

16 Part 2, Chapter 16: Business Deductions

16.1 Ordinary & Necessary Test 16.2 Business Travel Expenses 16.3 Business Meals (50% Limitation) 16.4 Business Use of Vehicle 16.5 Home Office Deduction 16.6 Business Interest Limitation (163(j)) 16.7 Business Bad Debts

17 Part 2, Chapter 17: Business Credits & Fringe Benefits

17.1 General Business Credit Overview 17.2 R&D Credit & Disabled Access Credit 17.3 Small Employer Health Insurance Credit 17.4 Fringe Benefit Rules 17.5 Cafeteria Plans (Section 125) 17.6 Achievement Awards & Other Benefits

18 Part 2, Chapter 18: Sole Proprietorships

18.1 Schedule C Overview 18.2 Calculating Net Profit/Loss 18.3 Self-Employment Tax (Schedule SE) 18.4 Estimated Tax Payments 18.5 Hobby Loss Rules

19 Part 2, Chapter 19: Partnerships

19.1 Partnership Formation 19.2 Partner's Basis Calculation 19.3 Form 1065 Overview 19.4 Schedule K-1 (Partner's Share) 19.5 Guaranteed Payments 19.6 Partnership Distributions 19.7 At-Risk & Passive Activity Rules 19.8 Partnership Termination & Liquidation

20 Part 2, Chapter 20: C Corporations

20.1 Form 1120 Overview 20.2 Corporate Tax Rate (21%) & CAMT 20.3 Accumulated Earnings Tax 20.4 Dividends Received Deduction 20.5 Earnings & Profits (E&P) 20.6 Corporate Distributions, Dividends & Stock Redemptions 20.7 §351 Transfers, §1032, §1202 QSBS & Other Corporate Provisions 20.8 Corporate Liquidation

21 Part 2, Chapter 21: S Corporations

21.1 S Election Requirements (Form 2553) 21.2 Form 1120-S Overview 21.3 Shareholder Basis Calculation 21.4 Reasonable Compensation 21.5 S Corporation Distributions 21.6 Built-In Gains Tax & Termination

22 Part 2, Chapter 22: Specialized Business Returns

22.1 Trusts & Estates (Form 1041) 22.2 Simple vs. Complex Trusts 22.3 Distributable Net Income (DNI) 22.4 Tax-Exempt Organizations (Form 990) 22.5 Retirement Plans (Form 5500) 22.6 Qualified Retirement Plans Overview 22.7 Farm Taxation 22.8 Rental Real Estate Activities

23 Part 3, Chapter 23: Practice Before the IRS

23.1 What is Practice Before the IRS? 23.2 Who Can Practice (Full Rights) 23.3 Limited Practice Rights (AFSP, Unenrolled) 23.4 Special Relationships (Family, Employees) 23.5 PTIN Requirements 23.6 Circular 230 Overview 23.7 Office of Professional Responsibility (OPR)

24 Part 3, Chapter 24: Becoming & Maintaining EA Status

24.1 Two Paths to EA (Exam vs. IRS Experience) 24.2 Application Process (Form 23) 24.3 Background & Compliance Checks 24.4 Renewal Requirements (Form 8554) 24.5 Continuing Education Requirements 24.6 Inactive Status & Termination

25 Part 3, Chapter 25: Practitioner Duties (Circular 230)

25.1 Due Diligence Requirements 25.2 Knowledge of Client's Omission 25.3 Conflict of Interest Rules 25.4 Fee Requirements (Contingent, Unconscionable) 25.5 Advertising & Solicitation Rules 25.6 Tax Return Position Standards 25.7 Written Advice Standards 25.8 Sanctions & Penalties for Violations

26 Part 3, Chapter 26: Power of Attorney & Authorization

26.1 Form 2848 (Power of Attorney) 26.2 CAF (Centralized Authorization File) 26.3 Form 8821 (Tax Information Authorization) 26.4 Third-Party Designee 26.5 Signing Returns for Taxpayers 26.6 Client Confidentiality & Privilege 26.7 Representing Clients in Audits (Examination) 26.8 Appealing IRS Decisions 26.9 Collection Representation

27 Part 3, Chapter 27: Legal Authority & Research

27.1 Hierarchy of Tax Authority 27.2 Internal Revenue Code 27.3 Treasury Regulations 27.4 Revenue Rulings & Procedures 27.5 Court Cases & Precedent 27.6 Statutes of Limitations

28 Part 3, Chapter 28: Specific Representation Issues

28.1 Trust Fund Recovery Penalty (TFRP) 28.2 Innocent Spouse Relief (Form 8857) 28.3 Injured Spouse Allocation (Form 8379) 28.4 Penalty Abatement (FTA & Reasonable Cause) 28.5 Taxpayer Advocate Service (TAS) 28.6 Freedom of Information Act (FOIA)

29 Part 3, Chapter 29: Final Review & Exam Strategy

29.1 Exam Structure & Logistics (2026-2027) 29.2 The "Clock" of Representation (Master Deadlines) 29.3 Ethics vs. Law (Sanctions & Penalties) 29.4 Final Mock Review & Exam Strategy

30 Part 3, Chapter 30: Filing Process & E-File

30.1 E-File Requirements (The "More Than 10 Returns" Rule) 30.2 ERO Responsibilities 30.3 EFIN & Application Process 30.4 Form 8879 (Signature Authorization) 30.5 Record Retention & Data Security (WISP) 30.6 Preparer Penalties (Filing Specific)

7.1 Standard Deduction by Filing Status

Key Takeaways Explain This Topic AI

2025 standard deduction (OBBBA-bumped, retroactive to Jan 1, 2025): Single/MFS $15,750, MFJ/QSS $31,500, HoH $23,625

Existing age-65/blind additional standard deduction is unchanged: $2,000 per qualifying condition (Single/HoH) or $1,600 per condition per spouse (MFJ/MFS)

NEW OBBBA Senior Bonus Deduction (2025-2028): additional $6,000 per qualifying individual age 65+ with a valid SSN; phases out 6% above MAGI $75K Single/HoH or $150K MFJ; not available to MFS

Dependent's standard deduction is the GREATER of $1,350 OR earned income + $450 (capped at the regular standard deduction for the dependent's filing status)

Taxpayers who MUST itemize: MFS when spouse itemizes, nonresident aliens, dual-status aliens, and short tax year filers

Last updated: October 2026

The standard deduction is one of the most fundamental concepts in individual taxation. It represents a fixed dollar amount that taxpayers can subtract from their Adjusted Gross Income (AGI) to reduce their taxable income. For the vast majority of taxpayers (approximately 90%), claiming the standard deduction is simpler and more beneficial than itemizing on Schedule A.

2025 Standard Deduction Amounts (OBBBA-adjusted)

Rev. Proc. 2024-40 originally set the 2025 amounts at $15,000 / $30,000 / $22,500. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, retroactively increased each amount by $750 / $1,500 / $1,125 for the entire 2025 tax year:

  • Filing Status 2024 2025 (post-OBBBA)
  • Single $14,600 $15,750
  • Married Filing Jointly (MFJ) $29,200 $31,500
  • Married Filing Separately (MFS) $14,600 $15,750
  • Head of Household (HoH) $21,900 $23,625
  • Qualifying Surviving Spouse (QSS) $29,200 $31,500

Key Observations:

  • MFJ and QSS receive the same amount—exactly double the Single amount
  • MFS receives the same amount as Single (not half of MFJ)

HoH falls between Single and MFJ, reflecting the additional expenses of maintaining a household with a qualifying person

Existing Additional Standard Deduction for Age 65+ or Blindness (unchanged)

Taxpayers who are age 65 or older or legally blind at year-end qualify for an additional standard deduction added to the basic amount above. OBBBA did not change these amounts; they remain at the 2024 levels rounded up:

  • Taxpayer Status Additional Amount (2025)
  • Single or HoH – Age 65+ $2,000
  • Single or HoH – Legally Blind $2,000
  • Single or HoH – Both 65+ AND Blind $4,000
  • Married (MFJ, MFS, QSS) – Age 65+ $1,600 per spouse
  • Married (MFJ, MFS, QSS) – Legally Blind $1,600 per spouse
  • Married (MFJ, MFS, QSS) – Both 65+ AND Blind $3,200 per spouse

Age 65 Rule: For tax purposes, you are considered age 65 on the day before your 65th birthday. For the 2025 return, a taxpayer is considered 65 if born before January 2, 1961 .

Legal Blindness: Eyesight no better than 20/200 in the better eye with corrective lenses, OR field of vision 20 degrees or less. A statement from an ophthalmologist/optometrist is required.

NEW: OBBBA Senior Bonus Deduction (Tax Years 2025-2028)

OBBBA added a brand-new temporary deduction for older taxpayers. This is separate from —and stacks on top of —the existing age-65 additional standard deduction above.

Senior Bonus Deduction Rules:

  • Amount: Additional $6,000 per qualifying individual age 65 or older at the end of the tax year
  • SSN required: Each qualifying individual must have a valid Social Security Number
  • Available to BOTH itemizers AND standard-deduction filers (does not require Schedule A)
  • Stacks with the existing $2,000 / $1,600 age-65 additional standard deduction
  • MFS NOT eligible (statutory bar)
  • Sunset: Expires December 31, 2028

MAGI Phase-Out (6% per dollar over threshold):

  • Filing Status Phase-Out Begins Fully Phased Out
  • Single / HoH MAGI > $75,000 $175,000
  • MFJ (each spouse 65+) MAGI > $150,000 $250,000

Example – Single Senior, MAGI $80,000, Age 67:

  • Basic 2025 standard deduction: $15,750
  • Age 65+ additional: $2,000
  • Senior Bonus Deduction: $6,000 minus ($80,000 – $75,000) × 6% = $6,000 – $300 = $5,700
  • Total deduction: $23,450

Example – MFJ, Both Spouses Age 66, MAGI $140,000:

  • Basic 2025 standard deduction: $31,500
  • Age 65+ additional: $1,600 × 2 = $3,200
  • Senior Bonus: $6,000 × 2 = $12,000 (no phase-out; MAGI under $150,000)
  • Total deduction: $46,700

Example – MFJ, Both Age 70, MAGI $200,000:

  • Basic 2025 standard deduction: $31,500
  • Age 65+ additional: $3,200
  • Senior Bonus before phase-out: $12,000; phase-out = ($200,000 – $150,000) × 6% = $3,000; bonus = $9,000
  • Total deduction: $43,700
  • Dependents' Standard Deduction Limitation (2025)

If a taxpayer can be claimed as a dependent on someone else's return, their 2025 standard deduction is the GREATER OF :

  • $1,350 (the minimum), OR
  • Earned income + $450

The total cannot exceed the regular standard deduction for the dependent's filing status ($15,750 for Single in 2025).

  • Dependent's Earned Income Calculation 2025 Standard Deduction
  • $0 (unearned only) Greater of $1,350 or ($0 + $450) = $1,350 $1,350
  • $700 Greater of $1,350 or ($700 + $450) = $1,350 $1,350
  • $1,000 Greater of $1,350 or ($1,000 + $450) = $1,450 $1,450
  • $3,000 Greater of $1,350 or ($3,000 + $450) = $3,450 $3,450
  • $16,000 Greater of $1,350 or ($16,000 + $450) = $16,450 $15,750 (capped)

Example: Sarah, age 17, is claimed as a dependent by her parents. In 2025 she earns $4,200 from a summer job and has $800 in interest.

  • $4,200 + $450 = $4,650
  • Greater of $1,350 or $4,650 = $4,650 (less than $15,750 cap)
  • Sarah's 2025 standard deduction: $4,650
  • Taxpayers Who CANNOT Claim the Standard Deduction

Certain taxpayers are not allowed to claim the standard deduction and must itemize :

MFS when spouse itemizes: If one spouse itemizes, the other must also itemize.

Nonresident aliens (with limited exceptions for those married to U.S. citizens/residents who elect resident treatment).

Dual-status aliens for the year of status change.

Short tax year filers (less than 12 months due to change in accounting period).

Estates and trusts (use an income distribution deduction instead).

Partnerships (deduction passes through to partners individually).

Standard Deduction vs. Itemizing: The Decision

Taxpayers should claim the larger of their standard deduction or total itemized deductions. Common Schedule A items include:

  • Medical expenses over 7.5% of AGI (permanent under OBBBA)
  • State and local taxes (SALT) – 2025 cap raised to $40,000 ($20,000 MFS) under OBBBA
  • Mortgage interest on up to $750,000 acquisition debt (TCJA limit, made permanent by OBBBA)
  • Charitable contributions
  • Casualty/theft losses only from federally declared disasters

With the OBBBA-bumped standard deduction and the new senior bonus, even fewer taxpayers benefit from itemizing—but the much higher SALT cap pulls more high-tax-state filers back into itemizing.

Personal Exemption Permanently Suspended

OBBBA made permanent the TCJA suspension of the personal exemption (still $0 ). Taxpayers no longer claim a personal exemption deduction—the standard deduction and child/dependent credits replace it.

Looking Ahead: 2026+

Standard deduction inflation-adjusts in 2026 from the $15,750 / $31,500 base.

The Senior Bonus Deduction continues through 2028, then sunsets.

The personal exemption stays suspended permanently under OBBBA.

EA Exam Tips

High-Frequency 2025 Topics:

  • Memorize 2025 standard deduction: $15,750 / $31,500 / $23,625 (Single/MFJ/HoH)
  • Remember OBBBA raised these from Rev. Proc. 2024-40 figures retroactively
  • Senior Bonus = $6,000 per senior (65+), with MAGI phase-out and SSN requirement
  • The age-65 / blind additional ($2,000 or $1,600) is on top of the Senior Bonus
  • MFS cannot claim the Senior Bonus
  • Dependent standard deduction floor is $1,350 in 2025 (up from $1,300)
  • 'Age 65 on day before birthday' → born before January 2, 1961 for 2025

Common Exam Traps:

  • Confusing 2024 figures with 2025 figures—always use the post-OBBBA numbers
  • Stacking the Senior Bonus on top of the existing $2,000/$1,600 (they are separate)
  • Forgetting the $6,000 phase-out at MAGI $75K/$150K
  • Assuming the Senior Bonus is only for itemizers (it is available to all except MFS)