Definition:
Amounts that can be subtracted from a person's gross or adjusted-gross income in order to reduce their tax liability when filing income tax returns with the IRS. Some deductions are given based only on specific income levels or expenses. A standard deduction is a fixed amount, but if the sum of certain things like real estate taxes, state and local taxes, and interest payments on a mortgage exceed your standard deduction, itemizing may be a better strategy in order to minimize your tax liability.
