Welcome to our new series – Taxes 101! We want to help all you do-it-yourself tax filers know the income tax basics. That way in January, you can come back to DIY Tax to file your accurate return online and get the refund you deserve.
This one’s all about the income tax deduction. In case you didn’t know, tax deductions are subtracted from your income, decreasing the amount of tax you owe the government. Sounds awesome, right?
You might be thinking, “Of course I know what tax deductions are.” What you probably don’t know are the dozens of deductions you may qualify for each year. There’s nothing worse than filing your return, only to find out that there was something you could’ve done to owe the IRS less or increase your tax refund.
How to Deduct
When you file, you’ll choose either a standard or itemized deduction. If you’re up for it, figure out your deductions using both, then choose the one where you pay the least tax.
- Standard Deduction – fixed amount that is deducted from your taxable income
- Itemized Deduction – calculated expenses considered deductible under current tax laws
Common Tax Deductions
- Work-related expenses like uniforms and home office
- Individual Retirement Arrangements (IRA) contributions
- Charitable contributions
- Student loan interest
- Medical and dental expenses
- Paid alimony
Not-So-Common Tax Deductions
- Cost of tax preparation
- Casualty or theft losses
- Moving expenses
- Gambling losses
- Job search expenses
- Lawn care and landscaping
- Pet moving expenses
We’ll keep posting helpful, relevant resources on all things taxes and DIY here on our blog. Follow us on Facebook and Twitter to keep up with the Taxes 101 series. Let us know other tax deductions in the comments below!