Q:

What does the standard tax deduction mean?

A:

Quick Answer

Under U.S. tax law, the standard deduction is a dollar amount reported on a tax return that reduces a taxpayer's reported taxable income, according to the Internal Revenue Service. The standard deduction is a benefit that eliminates the need to itemize deductions, saving time.

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Full Answer

A taxpayer can use either itemized deductions or the standard deduction on a tax return, but not both, explains the Internal Revenue Service. Thus, the taxpayer can choose the deduction method which gives her the lowest tax liability. The standard deduction amount depends primarily on the taxpayer's filing status. Thus, a single taxpayer will have a different deduction amount than a married couple filing jointly will have.

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