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Above The Line Deduction

Definition

In the United States tax law, an above-the-line deduction is a deduction that the Internal Revenue Service allows a taxpayer to subtract from his or her gross income in arriving at "adjusted gross income" for the taxable year. These deductions are set forth in Internal Revenue Code Section 62. A taxpayer's gross income minus his or her above-the-line deductions is equal to the adjusted gross income. Because these deductions are taken before adjusted gross income is calculated, they are designated "above-the-line." Thus, those deductions allowed in computing "taxable income" under section 63 of the IRC are "below the line deductions". Above-the-line deductions may be more valuable to high income taxpayers than below-the-line deductions.

What is 'Above The Line Deduction'

Above the line deductions are certain types of deductions that are subtracted from your income before the adjusted gross income is calculated for tax purposes.

Explaining 'Above The Line Deduction'

Above the line deductions include such items as losses on a property sale, alimony payments and educational expenses. Since above the line deductions are generally deducted from taxable income, they are advantageous to taxpayers in the sense that they reduce the overall tax burden.


Further Reading


Tax and Economic Policy Responses to the Medicaid Long-Term Care Financing Crisis: A Behavioral Economics Approach
heinonline.org [PDF]
… Medicaid coverage for pregnant women with in- come below 133% of the federal poverty line) … in detail in subsequent sections, include federal and state income tax deductions for the … 57 See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 46-48 (4th ed. 2000) …

Beyond tax relief: Long-term challenges in financing higher educationBeyond tax relief: Long-term challenges in financing higher education
www.jstor.org [PDF]
… Medicaid coverage for pregnant women with in- come below 133% of the federal poverty line) … in detail in subsequent sections, include federal and state income tax deductions for the … 57 See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 46-48 (4th ed. 2000) …

Economic Value Added as a measurement tool of financial performanceEconomic Value Added as a measurement tool of financial performance
www.sciencedirect.com [PDF]
… Medicaid coverage for pregnant women with in- come below 133% of the federal poverty line) … in detail in subsequent sections, include federal and state income tax deductions for the … 57 See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 46-48 (4th ed. 2000) …

Federal financial aid for higher education: Programs and prospectsFederal financial aid for higher education: Programs and prospects
vtechworks.lib.vt.edu [PDF]
… Medicaid coverage for pregnant women with in- come below 133% of the federal poverty line) … in detail in subsequent sections, include federal and state income tax deductions for the … 57 See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 46-48 (4th ed. 2000) …

Taxes and corporate finance: A reviewTaxes and corporate finance: A review
academic.oup.com [PDF]
… Medicaid coverage for pregnant women with in- come below 133% of the federal poverty line) … in detail in subsequent sections, include federal and state income tax deductions for the … 57 See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 46-48 (4th ed. 2000) …

Determinants of consumer financial risktaking: Evidence from deductible choiceDeterminants of consumer financial risktaking: Evidence from deductible choice
papers.ssrn.com [PDF]
… Medicaid coverage for pregnant women with in- come below 133% of the federal poverty line) … in detail in subsequent sections, include federal and state income tax deductions for the … 57 See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 46-48 (4th ed. 2000) …

Corporate taxation, debt financing and foreign-plant ownershipCorporate taxation, debt financing and foreign-plant ownership
www.sciencedirect.com [PDF]
… Medicaid coverage for pregnant women with in- come below 133% of the federal poverty line) … in detail in subsequent sections, include federal and state income tax deductions for the … 57 See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 46-48 (4th ed. 2000) …


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