Tax deductions are expenses that reduce the amount of income subject to tax.
There are two types of deductions most taxpayers will qualify for:
In addition to these two types of deductions, there are also deductions available to taxpayers who take either the standard deduction or who itemize deductions.
There are over 50,000 tax deductions in tax code and regulations. Many of these deductions apply to individuals as well as businesses. The most common deductions include:
- The Standard deduction:
- The standard deduction is a fixed dollar amount based on your filing status.
- Itemized deductions
- Miscellaneous itemized deductions
- Archer medical savings accounts (MSAs)
- Casualty and theft losses
- Charitable contributions
- Deductible taxes
- Health savings account (HSAs)
- Interest expenses
- Medical and dental expenses
- Mortgage points
- Employee business expenses
- Student loan interest