Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Standard Deduction and Tax Computation

Deductions

What are deductions?

Deductions are subtractions from a taxpayer's adjusted gross income (AGI). They reduce the amount of income that is taxed.

Most taxpayers have a choice of taking a standard deduction or itemizing their deductions. When taxpayers have a choice, they should use the type of deduction that results in the lower tax.

Some taxpayers may need to use the standard deduction worksheet in the Form 1040 Instructions.

Use the interview techniques and tools discussed in earlier lessons to determine if the standard deduction will result in the largest possible deduction for the taxpayer.

Scale balancing amounts labeled standard and itemized.