Question

The basic and additional standard deductions both are subject to an annual adjustment for inflation.

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Answer 1

Yes, the basic and additional standard deductions are both subject to an annual adjustment for inflation. This adjustment helps ensure that taxpayers are not being taxed on income they need to cover basic living expenses.

Step-by-step explanation:

Yes, the basic and additional standard deductions are both subject to an annual adjustment for inflation. This means that the amounts of these deductions are increased each year to keep up with the rising cost of living due to inflation.

For example, if the basic standard deduction in a certain year is $12,000 and the additional standard deduction is $1,000, these amounts may be adjusted to $12,500 and $1,100 respectively in the following year to account for inflation.

This adjustment helps ensure that taxpayers are not being taxed on income they need to cover basic living expenses.