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The standard deduction removes this as a concern for most Americans.
by jimbob45 7y ago
The standard deduction removes this as a concern for most Americans.
- susijdjdjxa 7y agoI don’t understand, can you elaborate? Hiding some of your income reduces your tax paid regardless of whether you take the standard deduction.
- mandelbrotwurst 7y agoWell, unless you actually earn an amount that is less than the standard deduction, in which case you gain nothing by hiding those earnings, or if you actually earn only slightly more than the standard deduction, then you only gain slightly. That said, I think the person you're replying to is mostly wrong since most American do more than the standard deduction several times over.
- topkai22 7y agoThe standard deduction doesn't help for social security and Medicare tax.
- bb2018 7y agoI'm a really naive when it comes to tax law and a lot of economics statistics - but I'm having trouble seeing this. If I am a waiter who made 35,000 in reported income and 10,000 in unreported income I made 45,000. I can take the standard deduction on 35,000 and in all statistics used by think tanks/reporters/politicians I will weight in the category of those who made ~35,000. Am I missing something?
- thenewnewguy 7y agoNo, your parent poster is completely wrong. You'll pay more in taxes reporting 45k with the standard deduction than if you report 35k with the standard deduction. The only scenario in which the standard deduction "fixes" this issue is if it reduces your taxable income to the point where you do not owe income tax regardless of if you report that extra income or not.