Above the Line Deduction

Above the line deductions can be defined as certain type of financial deductions that are deducted from the income of the individual before adjusting the income for the deduction of the income tax in the gross format. There are a number of examples of the above the line deductions from the gross income and these examples include educational expenses bear by an individual, losses occurred on the sale of the property, alimony payments and other such expenses that are to be fulfilled by the individual before calculating gross salary for the deduction of income tax and other purposes.

As it seems that these deductions that are called as above the line deductions are a burden on the individual however the actual situation is vice versa. All these deductions are deducted from the taxable income so their deduction becomes advantageous for the taxpaying individual as these deductions reduce the overall burden of the tax.

Other Related Accounting Articles:

• Above the Line Deduction
• Adjusted Gross Income
• Net Operating Loss
• Qualified Annuity
• Importance of Overhead Ratio
• What are Wage Expenses?
• Debt to Income Ratio
• Marginal Tax Rate
• Factor Income