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 ?
They have taxable income of $50,000 and claim the standard deduction.
As a group, the well-off would bear a heavier burden than the poor if there were smaller annual inflation increases for income tax brackets, the personal exemption and standard deduction.
The advantages to filing as head of household are lower tax rates and a higher standard deduction than the single filing status.
The benefit resulting from the double standard deduction could be realized in one year, in addition to a larger itemized deduction in the next year.
It is easy to overlook the fact that if a couple files separately, each one filing as MFS, then there are restrictions on their use of the standard deduction.
This filing status often provides the largest standard deduction and the lowest effective tax rate.
Because a higher Consumer Price Index (CPI) pushes the definition of the brackets upward and also increases the standard deduction and exemption amounts, the taxes due on the same income decrease from year to year.
In essence, the $900 of net short-term capital gain is offset by her $1,050 standard deduction, and her $1,050 of taxable income consists of preferential income taxed at a zero rate.
Many filers make mistakes figuring their Earned Income Tax Credit, Child and Dependent Care Credit, and the standard deduction.
People 65 and over also should consider whether it's more beneficial for them to claim the standard deduction or to itemize.
This deduction is not available to individuals who choose the standard deduction.
If they amended their return, A would lose more than half of the benefit of a standard deduction, since only A's state withholding would be deductible on the joint return, which is less than the standard deduction.

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