standard deduction


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Standard deduction

The IRS-specified amount by which a taxpayer is entitled to reduce income an alternative to itemizing deductions.

Standard Deduction

In American tax law, the portion of an individual's or couple's income that is not taxed. The standard deduction is taken after computing the adjusted gross income. Taxpayers have the option of choosing between the standard deduction and making itemized deductions, based on medical expenses or local taxes paid. Itemized deductions may or may not result in a larger percentage of income that is tax free, and taxpayers usually take the larger deduction. The amount in the standard deduction varies from year to year, depending on inflation and a person's filing status. However, it is higher for persons over age 65 and blind persons.

standard deduction

The minimum deduction from income allowed a taxpayer for calculating taxable income. Individuals with few itemized deductions elect the standard deduction in place of itemizing deductions. Formerly called zero bracket amount.
References in periodicals archive ?
2) A standard deduction of Rs 40,000 has been proposed to be introduced for salaried individuals in Budget 2018.
In this case, we look to two competing elements: standard deduction and itemized deduction.
This bill keeps more of taxpayers hard-earned money in their pockets by doubling the standard deduction and reducing income tax rates.
40,000 worth increase in the Union Budget 2018-19, along with a standard deduction of Rs.
Since taxpayers will use the greater of their standard deduction or their itemized deductions, fewer taxpayers will itemize.
Keith Walker, assistant professor in the School of Accountancy at Southern Illinois University-Carbondale, said the standard deduction is more or less a tipping point which may entice people to give more to charities in order take advantage of itemizing deductions.
Benzarti estimates the perceived compliance costs to tax filers by computing whether there were "too few" taxpayers with itemized deductions slightly greater than the standard deduction threshold.
Dan Coates of Indiana, now Trump's director of national intelligence, also includes a big increase in the standard deduction, leading some Republicans to say "We're doing Ron Wyden's bill," the senator said.
That standard deduction is now $6,350 for single taxpayers, $9,350 for heads of households, and $12,700 for couples filing joint returns.
The potential elimination of the Affordable Care Act investment tax provision creates an incentive for high-income taxpayers to push capital gains out of 2016 into 2017, when the provision would not be in effect, and the increase in the standard deduction creates a modest incentive for middle-income taxpayers to accelerate itemized deductions into 2016, when these deductions will be most useful.
Tax filing requirement thresholds, the standard deduction and certain credits were adjusted along with income tax brackets based on the inflation rate of 2.
For 2015, net unearned income is total unearned income less $1,050 (the minimum standard deduction for a dependent), less another $1,050 or allowable itemized deductions directly connected with the production of the unearned income, whichever is greater (Revenue Procedure 2014-61).

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