Even if you don’t have enough deductions to itemize, you can still take some deductions.
It’s not always beneficial to itemize. In fact, with the Internal Revenue Service’s current standard deduction for 2025 at $15,000 for a single filer and $30,000 for married filing jointly, most Americans who can’t itemize go with the standard deduction.
But that doesn’t mean you have to give up all deductions. There are still some ways to subtract deductions from your gross income. These are called above- and below-the-line deductions. And if you’re not using them, you may be leaving money on the table.
| 2 Types of Deductions to Reduce Tax Liability | Contributions to Traditional IRA |
| Alimony Payment Deduction | Contributions to Health Savings Accounts |
| Student Loan Interest Is Deductible | Business Use of Your Car or Home |
| Teachers’ Educational Expenses | Take Your Above-the-Line Deductions |
2 Types of Deductions to Reduce Tax Liability
A tax deduction reduces the amount of taxable income, which ultimately reduces your liability. There are two types of deductions. They are above-the-line deductions and below-the-line deductions.
With above-the-line deductions, you don’t itemize. But you can still reduce your gross income. People who take the standard deduction use the above-the-line deduction.
Below-the-line deductions are for those filers who itemize. You may want to itemize if your total deductions are more than your standard deduction.
Above-the-line deductions are found on Schedule 1 IRS Form 1040. According to the IRS, there are several above-the-line deductions you can take.
Contributions to Traditional IRA
A traditional individual retirement account (IRA) can benefit you in two ways. Your contributions grow tax-deferred, and, according to the IRS, depending on your circumstances, it may be an above-the-line deduction. The deduction is limited if you or your spouse are covered by a retirement plan at work or your income exceeds certain levels.
There are restrictions on how much you can contribute to your traditional IRA. For 2025, according to the IRS, the amount is $7,000 per individual or $8,000 if you’re age 50 or older. These amounts remained the same as they were in 2024.
Roth IRAs are not deductible because they are funded by after-tax money.
Alimony Payment Deduction
According to the IRS, alimony payments may be an above-the-line deduction if specific requirements are met. Some requirements are:
- Payment is in cash (including checks or money orders).
- Payment made under a divorce or separation instrument to a spouse or former spouse.
- Spouses don’t file a joint return with each other.
- Spouses aren’t members of the same household when the payment is made.
There may be other restrictions that apply to you, so consider contacting a tax preparer or the IRS if you have a question.
Neither child support nor voluntary payments are allowed as a deduction.
By Anne Johnson
