A Simple Guide to Save on the Most Common Tax Deductions

What are Tax Deductions?

Tax deductions are an amount of dollars which can be subtracted from your taxable income (also called adjusted gross income, or AGI), making your taxable income lower.  All things being equal, the lower your taxable income, the lower your tax bill.

1

If you live in a state which does assess a state income tax, you have the choice of taking tax deductions on the higher of either the state income tax paid or the state sales tax paid.

Tax Deductions for State Sales/Income Taxes

2

Every year, there are many wonderful, qualified charities who would be more than happy to take money or goods from you.  In exchange, you can count these items as tax deductions and lower your taxable income.

Charitable Contributions

3

The requirements were simply moving more than 50 miles and you needed to move your household goods to a new area.  The IRS allowed you to deduct $0.23 per mile and most associated costs with the move (e.g., parking fees and tolls).

Moving Expenses to Start a New Job for the Military

4

In essence, a child who isn’t claimed as a dependent can qualify for tax deductions worth up to $2,500 per year for student loan interest paid by Mom and Dad.

Student Loan Interest Paid by Your Parents

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