Desde Investopedia

TERM OF THE DAY

Standard Deduction The IRS standard deduction is the portion of income that is not subject to tax and that can be used to reduce a taxpayer's tax bill. 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.

Breaking it Down: The 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... Read More