Something for everyone: Types of Tax deductions

A tax deductions (also called a tax write off) lets you subtract an amount of money from what is called your taxable income(the amount on which you must pay tax). The more deductions you have the lower your taxable income will be therefore the less tax you pay.

Fours types of tax deductions you should consider:

STANDARD DEDUCTIONS:

A specified amount taxpayers may deduct every year instead of adding their deductions up one by one or itemize.

ITEMIZED DEDUCTIONS

Expenses that may be deducted individually instead of taking the standard deduction. These include items such as home mortgage interest, state and local taxes, charitable contributions and medical expense above a threshold amount(7.5 % of AGI).

ADJUSTMENTS TO INCOME

These are a group of expenses that you can deduct whether you itemize or take standard deductions.

BUSINESS DEDUCTIONS

These are for business owners only who can deduct such expenses as office space rent, supplies and equipment.