Standard Deduction

What does Standard Deduction mean?

A standard deduction is a dollar amount that taxpayers can use to reduce the amount of their adjusted gross income and thereby their taxable income when they do not elect to use the standard deduction.

The Internal Revenue Service defines the amount for the standard deduction each tax year. The amount is indexed for inflation, which typically means the standard deduction will increase every few years if not annually. The standard deduction for each taxpayer is based on the taxpayer's filing status. In addition, special provisions provide for an additional standard deduction for taxpayers who are blind, over the age of 65, or both. The standard deduction is available to both individual and married taxpayers.

A taxpayer cannot use both the standard deduction and itemized deductions in the same tax year. However, a taxpayer can choose the type of deductions that give the taxpayer the lowest tax liability. Unlike with itemized deductions, taxpayers do not have to provide evidence to support the use of the standard deduction.

Most taxpayers use the standard deduction on their income tax returns, because it is easier to calculate and because they do not have enough itemized deductions to exceed the standard deduction.

Previous Entry

Single

Next Entry

Tax Bracket


Browse Legal Glossary Alphabetically:

1 | A | B | C | D | E | F | G | H | I | J | L | M | N | O | P | Q | R | S | T | U | V | W | Z |




Tax Law Attorneys near Ashburn VA


Term of the Day

Adhesion Contract

An adhesion contract is a bargaining agreement between two parties, of which one party creates the contract to fit their own advantages, benefits, or wishes.

Category: