Definition of Standard deduction:
The Internal Revenue Service (IRS) standard deduction is the portion of income not subject to tax that can be used to reduce your tax bill. You can take the standard deduction only if you do not itemize your deductions using Schedule A of Form 1040 to calculate taxable income. The amount of your standard deduction is based on your filing status, age, and whether you are disabled or claimed as a dependent on someone else’s tax return.
Fixed amount that a tax payer is allowed to deduct from his or her adjusted gross income, in lieu of itemizing deductible personal expenses. Standard deduction amount is usually pegged to the inflation rate, and varies with the tax payers category such as single individual, married couple filing together, married couple filing separately, head of household.
Income tax is the amount of money that the federal or state government takes from your taxable income. It is important to note that taxable income and total income earned for the year are not the same. This is because the government allows a portion of the total income earned to be subtracted or deducted to reduce the income that will be taxed. Taxable income is usually smaller than total income due to deductions, which help to reduce your tax bill.
How to use Standard deduction in a sentence?
- Not all taxpayers qualify for the standard deduction.
- The IRS standard deduction is the portion of income not subject to tax that can be used to reduce your tax bill.
- Most taxpayers who use the standard deduction instead of itemizing do so because they don't have to keep track of qualifying expenses.
Meaning of Standard deduction & Standard deduction Definition