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Itemized deduction

Itemized deduction Definition

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. In other words, the taxpayer may generally deduct the total itemized deduction amount or the standard deduction amount, whichever is greater.

RELATED TERMS
Deduction
Standard deduction
RELATED CATEGORIES
Taxes




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