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I'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 reporte

by bb2018 7y ago

I'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 ago
No, 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.