Not every tax filing calls for itemizing deductions. In fact, most Americans who cannot itemize deductions opt to use the standard deduction set by the Internal Revenue Service (IRS) to reduce the amount of tax they owe. According to the IRS’s standard deduction for 2025, single filers can deduct $15,000 directly, while married couples filing jointly can deduct $30,000.
However, this doesn’t mean you have to forgo all deduction items. You can still deduct certain amounts from your total income through means known as “above-the-line deductions” and “below-the-line deductions”. Failure to utilize these deduction methods could result in paying more taxes than necessary.
Tax deductions serve to reduce your taxable income, thereby lowering the amount of tax you ultimately owe. Deductions are classified into two types: “above-the-line deductions” and “below-the-line deductions”.
” Above-the-line deductions”, not applicable in itemizing, can still reduce your taxable total income. Those opting for the standard deduction usually have the option to utilize these deductions.
“On the line deductions” are meant for those choosing to itemize their deductions. If your total deduction amount exceeds the standard deduction, considering itemizing could be beneficial.
The IRS Form 1040 Schedule 1 lists “above-the-line deductions”. As per the IRS regulations on “Personal Exemptions and Deductions”, there are several “above-the-line deductions” available to individuals.
Traditional individual retirement accounts (IRAs) have two main advantages: contributions are tax-deferred, and in some cases, your contributions may qualify as “above-the-line deductions” according to IRS rules. Contribution limits are restricted if you or your spouse are already participating in a retirement plan at work or if your income surpasses certain thresholds.
The contribution limits for traditional IRAs remain unchanged in 2025: individuals can contribute a maximum of $7,000 per year, or $8,000 for those aged 50 or above. Contributions to a Roth IRA are not tax-deductible but offer tax-free withdrawals under certain conditions.
Per IRS regulations, alimony payments can qualify as “above-the-line deductions” under specific conditions, such as being cash payments made as per a divorce or separation agreement to a former spouse, filing separate tax returns, and not being members of the same household at the time of payment.
Child support and voluntary payments do not count as deductible items.
Health Savings Account (HSA) contributions are eligible for “above-the-line deductions”.
If you have a high-deductible health insurance plan, contributing to an HSA offers two benefits: tax-deferred growth of your funds and tax-free withdrawals for qualifying medical expenses.
HSAs contributions are subject to limits set by the IRS at $4,300 for individuals and $8,550 for families annually.
Many individuals still repaying student loans can deduct loan interest in addition to claiming the standard deduction.
You can only claim the deduction if you are legally responsible for repaying qualified student loan interest. The deduction is capped at $2,500 or the actual amount of interest paid during that tax year, whichever is lower. The deduction phases out as your Modified Adjusted Gross Income (MAGI) increases, eventually becoming unavailable once your MAGI reaches the annual limit based on your filing status.
For instance, if you are a single filer and your MAGI reaches or exceeds $95,000 or $195,000 for married couples filing jointly, the student loan interest deduction is no longer available as per IRS regulations.
If you use a car solely for business purposes, you can deduct the entire ownership and operating costs (with a cap) following IRS rules. However, if the car is used for both business and personal reasons, you can only deduct the business portion.
You can choose between the standard mileage deduction or actual expense method to calculate the deduction amount. In 2025, the standard mileage deduction rate for business use vehicles and the self-employed is $0.70 per mile.
Part of your housing expenses may be deductible if you work from home, provided that a specific area is used exclusively for full-time work. Using your home for occasional work or personal use does not qualify for the deduction. The IRS has clear guidelines on deducting home offices.
Qualifying educators can deduct up to $300 of unreimbursed classroom expenses, including books, computers, stationery, and other classroom equipment as per IRS regulations.
Even if your deduction amount is not substantial enough for itemizing, there are still additional deductions you can claim. The standard deduction appeals to many taxpayers, but while using it, don’t forget to leverage “above-the-line deductions” like contributions to traditional IRAs, HSAs, and educator expenses.
Reference: Tax Deductions You Can Take Without Itemizing. (Published in English Epoch Times.)