Question

T/F: The effect of the standard deduction is to subject more of a taxpayer's income to Federal income tax liability.

Answer 1

The statement is false. The standard deduction reduces a taxpayer's income subject to Federal income tax liability.

Step-by-step explanation:

The statement is false. The effect of the standard deduction is to reduce a taxpayer's income that is subject to Federal income tax liability. The standard deduction is a set amount that reduces the taxable income of individuals and families who do not qualify for or choose to itemize deductions.

For example, let's say a taxpayer earns $50,000 in a year and qualifies for a standard deduction of $12,000. The taxable income after applying the standard deduction would be $38,000. This means that only $38,000 would be subject to Federal income tax liability, not the full $50,000.