An above-the-line deduction is a type of tax deduction that you subtract from your gross income to determine your adjusted gross income (AGI). These deductions lower your AGI, which in turn reduces your overall taxable income and the amount of tax you owe.
Unlike itemized deductions, above-the-line deductions are available to all taxpayers, regardless of whether they choose to itemize or take the standard deduction. Common examples include contributions to student loan interest, self-employment expenses, and certain education costs.
Because these deductions are applied before calculating AGI, they can also affect eligibility for other tax benefits that are based on income limits.