Standard Deduction

The standard deduction is a flat amount of income that federal income tax does not touch. It depends on your filing status and is adjusted for inflation each year. Married couples filing jointly get twice the single amount, and heads of household get an amount in between.

Federal withholding builds it in, so the first part of each year's pay is withheld at 0%. Your taxable wages minus the standard deduction is the amount the tax bracket rates apply to, and the bracket that last dollar lands in is your marginal tax rate.

You itemize instead only if your itemized deductions are larger. W-4 Step 4(b) is where you tell your employer about deductions beyond the standard one. Learn more in how much federal tax should be withheld, federal income tax withholding and the W-4 guide.