![]() ![]() You may drop into a lower tax bracket, depending on how much the standard deduction reduces your adjusted gross income (AGI). The standard tax deduction provides taxpayers a specific dollar amount of income they can subtract from their earned income on their federal tax return.īy using the standard deductions, a taxpayer could fall into a lower tax bracket and thus have a lower tax liability at the end of the year. The standard deductions for 20 are different, and your eligibility to take the standard deduction depends on factors unique to your finances. The Internal Revenue Service (IRS) permits taxpayers to deduct this amount from their taxable income in lieu of having to itemize deductions.Īlthough the standard deduction seeks to simplify some of the complexities of your tax returns, a host of factors should be considered before choosing between deductions. Depending on your own financial situation, you may opt to take a standard deduction or an itemized deduction on your tax return.įor tax purposes, a standard deduction is the dollar amount that taxpayers can deduct from their income before income taxes are applied.Standard deduction figures are determined by the IRS based on the taxpayer's filing status and the tax year.The standard deduction is a set amount taxpayers can deduct from earned income on their taxes.For a review of 2021 tax brackets, the 2021 standard deduction, and more, see here. If they owe more taxes than they had withheld, the taxpayer would owe the IRS a payment by April 17, 2023.Īgain, for a full review of the 2022 inflation adjustments in the tax code see here. If they had more taxes withheld than what they owe, they would receive a refund. The taxpayer would then reconcile the total tax owed with the amount in taxes they had withheld by their employer. Take $4,807.50 (the amount of taxes the taxpayer owes on their first $41,775 in income). ![]()
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