Standard deduction
Certified Financial Planner glossary · Certified Financial Planner
Definition
A fixed reduction of taxable income available instead of itemizing, indexed annually.
Standard deduction in plain English
Most clients no longer itemize, so charitable bunching and deduction timing suddenly matter more than they did a decade ago. The standard deduction is a fixed reduction of taxable income available instead of itemizing, and it is indexed annually. Stale Law answers recycle prior-year dollar amounts from old study notes. Compare the client's prospective itemized total to the current standard deduction before you recommend a bunching or itemizing strategy.
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