List of Tax Deductions

Whether it is tax season or not, even the thought of organizing and filing the returns and going through umpteen number of bills is mind-boggling. It's no wonder that you end up sitting through 11 months without making any headway with it. I have made an attempt to briefly list down some of the most common tax deductions that many of taxpayers tend to overlook while filing for an annual income tax returns. It must be noted that this list of tax deductions is made in accordance with the rules and guidelines that are issued by the Internal Revenue Service. However, it's not a comprehensive list. But before we start with this list, let us have a look at the meaning of tax deduction.

What is Tax Deduction

Tax deduction is basically exemption from taxation, that is provided by the government agency that collects taxes. The tax deduction can be provided with the help of many different ways and means. Tax deductions in many cases reduce the amount of income that is to be taxed. This amount is at times reduced, when the tax return is filed. Another way that is used is that of tax relief checks, where tax that is relieved is refunded by the way of checks. The tax relief checks are usually mailed to the taxpayer.

Saving Money Through Tax Deductions

There are two principal tax deductions that an individual can avail when he is filing the tax returns with the Internal Revenue Service. The following is a small list of the two classifications.

Standard Deductions
The standard deduction is a uniform deduction that is applicable to any person filing for a return. This deduction is provided in order to avoid double taxation, as taxpayers also pay State taxes along with the regular Federal Taxes. There are two further deductions in the standard deductions.

• The Basic Standard Tax can be availed by any taxpayer who pays state taxes and has maintained consistency in the filing of returns. The amount that is to be deducted depends on many different factors, such as age, disabilities, marital status, and also whether the payer has been a victim of any disaster. Provisions regarding the deductions for casualties, disasters and thefts, has been mentioned in Publication 547 by the IRS. Deductions regarding motor vehicles has been highlighted in Publication 553.
• The amount of Standard deduction is further increased for disability and age. The exact qualifying conditions have been mentioned in Publication 501 of the IRS.

Itemized Deductions
The second type of tax deduction that is used very commonly is that of itemized deductions. The following is a small tax deductions list that you may use. It must be noted that taxpayers cannot file for both standard and itemized deductions at the same time.

• The qualifying terms for itemized deductions are mentioned in Topic 501.
• Medical and dental expenses that can be deducted are specified in Topic 502.
• Taxes that are already paid and cannot be taxed again, have been mentioned in Topic 503.
• Home mortgages are also valid grounds for tax deductions and have been mentioned in Topic 504. Tax deductions for homeowners will help you to total up the amount that can be exempted under the tax deduction of mortgages.
• Contributions to welfare funds and miscellaneous funds is deductible in accordance with Topic 506.
• Interest that is paid and such related miscellaneous expenditures are deductible and have been elaborated upon in Topic 508.
• Many self employed people use their personal assets for business purposes. The deductions regarding the same have been mentioned in Topic 509 to 512 and 514. There are also several other publications by the IRS that would provide you with tax deduction options for small businesses, depending upon the type of business organization.
• Expenses that are related to education are also deductible and have been mentioned in Topic 513.
• Calamities, disasters and theft are also a valid ground for tax deductions and have been specified in Topic 515.

A list of tax reliefs for self employed is also specified in the Self-Employed Individuals Tax Center and the individual can file for Schedule C or C-EZ along with the normal From 1040. In addition to that, a list of tax benefits for truck drivers is also found in all the topics that come under the itemized tax deduction bracket. You may also check on the tax deductions list that are given in the Form 1040 instructions of the IRS. Corporates or business ventures can reduce the amount of taxes they owe through proper deduction preparation. To purchase any deductible items, you can use your credit card and deduct them with the help of Schedule A.

People who are earning less, can avail Earned Income Tax Credit and Saver's Credit benefits after meeting certain conditions. If you were searching for a job last year, here's a huge sigh of relief. You can claim these expenses on your deductibles. This holds true even if you have or have not found a new job. Suppose you have run out of money and cannot pay back your taxes completely, then using IRS Form 9465 is a good idea which gives you the option of paying your taxes in installments at a nominal fee. Filing taxes is not as daunting as it seems. All you require is good planning and organizing.