Business, Legal & Accounting Glossary
A standard deduction is an amount of income that can be deducted from a taxpayer’s adjusted gross income (AGI). The amount of standard deduction is not subject to taxes so applying the standard deduction will reduce a taxpayer’s tax liability. Taxpayers have to choose between using standard deduction or itemized deduction, they cannot use both in a same tax year. Taxpayers like to use standard deduction for several reasons. First, by using a standard deduction and not an itemized deduction, a taxpayer does not need to keep records of all tax-deductible expenses. Second, for most taxpayers, the amount of standard deduction is often greater than the deduction they would get if they itemized expenses that are tax-deductible. The amount of standard deduction will depend on the filing status of the taxpayer, whether the taxpayer can be claimed as a dependent on another taxpayer’s return, the age of the taxpayer, or whether the taxpayer is disabled. The amount of standard deduction changes every tax year and is inflation-adjusted.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Standard Deduction are sourced/syndicated and enhanced from:
This glossary post was last updated: 5th February, 2020 | 3 Views.