Why is the standard deduction being subtracted from my total income and not my agi

[xmasbaby0]

Your standard deduction lowers your taxable income. The standard deduction makes some of your income “tax free.”  It is not a refund.  You will see your standard or itemized deduction amount on line 12 of your 2023 Form 1040.

2023 STANDARD DEDUCTION AMOUNTS

SINGLE $13,850  (65 or older/legally blind + $1850)

MARRIED FILING SEPARATELY $13,850  (65 or older/legally blind + $1500)

MARRIED FILING JOINTLY $27,700  (65+/legally blind) )  + $1500 per spouse

HEAD OF HOUSEHOLD  $20,800 (65 or older/blind)  + $1850)

[LindaS5247]

The Standard Deduction is a specific dollar amount that reduces the amount of income on which you're taxed.

 Your Standard Deduction consists of the sum of the basic Standard Deduction and any additional Standard Deduction amounts for age and/or blindness. 

In general, the Standard Deduction is adjusted each year for inflation and varies according to your filing status, whether you're 65 or older and/or blind, and whether another taxpayer can claim you as a dependent. 

The Standard Deduction isn't available to certain taxpayers. 

You can't take the Standard Deduction if you itemize your deductions. 

If you look at your actual tax return, Form 1040, you can see how it works.

Lines 1a - 10 consist of all of your income items and adjustments thereof.  Line 11 is your adjusted gross income and your Standard Deduction is subtracted from that on line 12.  

Line 15 of your tax return, Form 1040 is your taxable income.  That is the amount of income subject to tax.  Any credits you may be due for children or dependents directly decrease your tax amount.

Your total tax (line 24) consists of tax due on your adjusted gross income, less any applicable tax credits.

Your total tax is reduced by any tax withheld or other "payments" and any credits such as the earned income credit, additional child tax credits or estimated taxes paid.  This is how your amount due or refund amount is determined.

Refer to Topic No. 501, Should I Itemize? For more information.

Click here for additional information regarding the Standard Deduction.