| Tax deductions, sometimes referred to as tax write | | | | For almost any taxpayer, it is better to itemize |
| offs, lower your taxable income. Lowering your | | | | deductions rather than taking the standard deduction. |
| taxable income decreases your tax liability and results | | | | The standard deduction is $5700 for individuals, $8350 |
| in you saving money on your taxes. Tax credits | | | | if you qualify as head of household, and $11,500 for |
| reduce the amount of taxes you pay without reducing | | | | married couples who file jointly. Some of the |
| your taxable income. It is good to keep the difference | | | | deductions you will want to include in an itemized return |
| between credits and deductions in mind when planning | | | | are mortgage interest, driving mileage, charitable |
| your personal tax strategy. | | | | donations, and medical expenses. There are many |
| In order to get the optimal amount of tax deductions, it | | | | other itemized deductions for which you may qualify, |
| is vital to keep detailed financial records throughout the | | | | depending upon your personal circumstance. Before |
| year. This may seem like an inconvenience, but the | | | | deciding whether to opt for the standard deduction, |
| money you can save by reducing your tax liability is | | | | add together all your possible itemized deductions. If |
| well worth a little extra bookkeeping. | | | | your itemized deductions exceed the standard |
| People often miss legitimate tax deductions by failing | | | | deduction in your category, you will want to file an |
| to keep records in the course of the year. For | | | | itemized return. |
| instance, keep a record of any charitable donations | | | | If some of your income falls into a higher tax bracket, |
| you make, whether cash or material goods. Maintain | | | | you might want to consider placing that amount into |
| an accurate record of the fair market value of any | | | | tax-deferred investments like an IRA in order to |
| goods you contribute, and be sure to get receipts. | | | | reduce your taxable income. |
| If you drive to and fro to do charitable work, work as | | | | It is important to note that above-the-line tax |
| an independent contractor, landlord, or do | | | | deductions can be taken in conjunction with the |
| un-reimbursed driving as part of your job, keep a | | | | standard deduction. Things like an IRA, 401K, health |
| record of these driving instances and mileage, as | | | | savings account, alimony, student loans, and |
| these trips might qualify for a mileage deduction on | | | | educational expenses qualify as above-the-line |
| your income tax return. | | | | deductions. For a list of above-the-line deductions, visit |
| If you are a homeowner, do not forget to deduct | | | | the Internal Revenue Service website at IRS.gov. |
| mortgage interest on your income tax return. | | | | |