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Under United States tax law, the standard deduction is a dollar amount that non-itemizers may subtract from their income before income tax (but not other kinds of tax, such as payroll tax) is applied. Taxpayers may choose either itemized deductions or the standard deduction, [1] but usually choose whichever results in the lesser amount of tax ...
Effectively, if you were married with two children, you would have claimed a $29,200 deduction between exemptions (four total) and the standard deduction. Now, personal exemptions no longer exist.
Under United States tax law, a personal exemption is an amount that a resident taxpayer is entitled to claim as a tax deduction against personal income in calculating taxable income and consequently federal income tax. In 2017, the personal exemption amount was $4,050, though the exemption is subject to phase-out limitations.
According to tax pros, itemizing generally only makes sense if your itemized deductions, taken together, add up to more than the current standard deduction of $13,850 for a single filer and ...
For example, the payroll tax system (FICA), a 12.4% Social Security tax on wages up to $117,000 (for 2013) and a 2.9% Medicare tax (a 15.3% total tax that is often split between employee and employer) is called a regressive tax on income with no standard deduction or personal exemptions but in effect is forced savings which return to the payer ...
It shields a portion of your earnings from income tax. While the standard deduction is the government's built-in subtraction that you can take while preparing your taxes, itemizing is composed of ...
3. Extra Standard Deduction. The standard deduction provides individuals with a certain threshold below which income is not taxed. However, some seniors may not be aware that this deduction is ...
Tax deductions above the line lessen adjusted gross income, while deductions below the line can only lessen taxable income if the aggregate of those deductions exceeds the standard deduction, which in tax year 2018 in the U.S., for example, was $12,000 for a single taxpayer and $24,000 for married couple. [1] [3]
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