Taxable Income: Taxable income in the U.S. includes wages, salaries, bonuses, tips, interest, dividends, capital gains, rental income, and other types of income. However, certain deductions, such as student loan interest, medical expenses, and retirement contributions, can reduce the amount of taxable income. Taxpayers may also subtract either a standard deduction or itemized deductions from their gross income to determine their taxable income. For the 2023 tax year, the standard deduction is $13,850 for single filers and $27,700 for married couples filing jointly.

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