An incurred expense which reduces an individual's taxable income, in accordance with IRS regulations. Examples include mortgage interest, state and local taxes, charitable gifts, and medical deductions.
Specific statutory income tax deductions permitted as adjustments from AGI, or below-the-line deductions, subtracted from AGI in arriving at an individual taxpayer's taxable income. Itemized deductions include medical and dental expenses (in excess of 7 1/2 percent of AGI), certain taxes paid, certain types of interest paid, charitable gifts, casualty and theft losses (in excess of 10 percent of AGI), and miscellaneous deductions, some of which are subject to a 2 percent of AGI floor and some of which are not. If the total of the itemized deductions exceeds the allowable standard deduction, this total is the amount deducted from AGI. The itemized deductions are subject to phaseout, or partial elimination, for high-income taxpayers with AGI in excess of a threshold amount.
A reduction in adjusted gross income for individual taxpayers. Items allowed to be deducted from AGI include medical expenses, interest, casualty losses, contributions, state and local income and real estate taxes and miscellaneous expenses. Some itemized deductions have limitations associated with them.
s â€“ Personal expenses allowed to be claimed on your tax return as deductions from your adjusted gross income. Examples are medical expenses, mortgage interest, real estate taxes, and charitable contributions. Taxpayers who itemize deductions may not claim the standard deduction.
Implicit tax Imputation tax system
Individual taxpayers in the United States are allowed a choice when preparing their Federal income tax returns. After computing their Adjusted gross income (AGI), taxpayers can itemize their deductions (from a list of allowable items) and subtract those itemized deductions (and any applicable personal exemption deductions) from their AGI amount to arrive at their taxable income amount. Alternately, they can elect to subtract the standard deduction for their filing status (and any applicable personal exemption deduction) to arrive at their taxable income.