Standard Deduction

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.

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.

Investment dictionary. . 2012.

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Look at other dictionaries:

  • standard deduction — see deduction Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. standard deduction …   Law dictionary

  • standard deduction — ˌstandard deˈduction [standard deduction] noun usually singular (US) a fixed amount of money that you can earn free of tax …   Useful english dictionary

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  • standard deduction — The IRS specified amount by which a taxpayer is entitled to reduce income an alternative to itemizing deductions. Bloomberg Financial Dictionary * * * standard deduction standard deduction ➔ deduction * * * standard deduction UK US noun [C or U]… …   Financial and business terms

  • standard deduction — An optional deduction allowed the taxpayer in computing net income for federal income tax. Internal Revenue Code § 141. A similar deduction in computing net income for state income tax …   Ballentine's law dictionary

  • standard deduction — noun (countable usually singular) AmE a fixed amount of the money you earn that you do not have to pay tax on …   Longman dictionary of contemporary English

  • optional standard deduction — See standard deduction …   Ballentine's law dictionary

  • deduction — de·duc·tion n 1: an amount allowed by tax laws to be subtracted from income in order to decrease the amount of income tax due see also internal revenue code in the important laws section compare credit, ex …   Law dictionary

  • Deduction — may refer to: in logic: Deductive reasoning, inference in which the conclusion is of no greater generality than the premises Natural deduction, an approach to proof theory that attempts to provide a formal model of logical reasoning as it… …   Wikipedia

  • standard — Stability, general recognition, and conformity to established practice. Standard Accident Ins. Co. v. Standard Surety & Casualty Co., D.C.N.Y., 53 F.2d 119, 120. A type, model, or combination of elements accepted as correct or perfect. A measure… …   Black's law dictionary

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