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May 7, 2020
Question

How does the $27,000 credit toward our total income or does it? Also, what is it for if not that?

  • May 7, 2020
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1 reply

VolvoGirl
Employee
May 7, 2020

Is that your Standard Deduction?  Are you both over 65?

 

The Standard Deduction is a good thing.  You get to subtract either the Standard Deduction or all your Itemized Deductions whichever is more.  It is subtracted off your income before the tax is calculated so you get taxed on a lower amount.  Which means the first 12,200 Single or 24,400 (27,000>65) Joint of your income is not taxed and is tax free.