Standard Deduction

[ˈstan-dərd di-ˈdək-shən]

What is the definition of Standard Deduction?

A fixed amount that individual taxpayers can subtract from their adjusted gross income to reduce taxable income, if they do not itemize their deductions. The standard deduction varies depending on the taxpayer's filing status and is adjusted annually.

Using Standard Deduction in an Example

For the tax year 2023, the standard deduction for a single filer is $12,950. This means a single taxpayer can reduce their taxable income by this amount, simplifying the tax preparation process by not itemizing individual deductions.

Using Standard Deduction in a sentence

During our tax planning session, our accountant advised us to take the standard deduction this year since our itemized deductions do not exceed the standard amount.

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