Standard Deduction
 |
Definition of 'Standard Deduction'A base amount of income that is not subject to tax and that can be used to reduce a taxpayer's adjusted gross income (AGI). A standard deduction can only be used if the taxpayer does not choose the itemized deduction method of calculating taxable income. The amount of the standard deduction is based on a taxpayer's filing status, age and whether he or she is disabled or claimed as a dependent on someone else's tax return. |
 |
Investopedia explains 'Standard Deduction'The biggest reason taxpayers use standard instead of itemized deductions is that taxpayers don't have to keep track of every possible tax deductible expense throughout the year. Plus, many people find the standard deduction amount to be fairly generous and usually greater than the total they could reach if they added up all of their tax-related expenses separately. The standard amounts are adjusted for inflation each year. |
Related Definitions
Articles Of Interest
-
Present Your Clients With A Year-End Review
If you want to build a better rapport with your clients, this is a good place to start. -
Tax Tips For The Individual Investor
We give you seven guidelines to help you keep more of your money in your pocket. -
An Overview Of Itemized Deductions
Not taking the standard deduction this year could save you hundreds of dollars. -
Calculating The Mortgage Interest Tax Deduction
The amount of money you save by paying your mortgage off quickly will far exceed any benefit from the mortgage interest tax deduction. -
How To Cut Your Alternative Minimum Tax
Save yourself money by lowering the amount of tax you owe. -
Top Tax Deductions For Brokers
If you are paying out of pocket, you can make your business expenses work for you at tax time. -
Which is better for tax deductions, itemization or a standard deduction?
Each deduction that you claim may result in a decrease in the amount of taxes that you owe. However, whether you receive the maximum possible deduction could depend on whether your deduction ... -
Has Income Tax Become A Class Tax On The Poor?
With more than 33% of American families falling close to the poverty line despite their adult members holding full-time employment, a rising number of citizens are being forced to pay a rate ... -
Possible Effects Of The Online Retail Tax
The U.S. Senate has passed a bill that will impose a sales tax on online retailers. Discover how the Marketplace Fairness Act could affect your bottom line. -
How To Get The Most Out Of Hiring An Accountant
When you hire an accountant, getting good tax advice going forward is as valuable as – or perhaps even more valuable than - getting the previous year’s taxes filed correctly. Learn what you need ...
Free Annual Reports
