1.4- What are Tax deductions?

When you claim federal tax credits and deductions on your tax return, you can change the amount of tax you owe. Deductions can reduce the amount of your income before you calculate the tax you owe. Examples of Tax Deductions include:

Work Related Deductions

• Business expenses

• Business use of car

• Business use of home

• Form 2106, Employee Business Expenses

• Are my work-related education expenses deductible?

Itemized Deductions

• Standard deduction and itemized deductions

• Deductible taxes

• State and local tax deduction limit

• Property tax

• Real estate tax

• Sales tax

• Charitable contributions

• Gambling loss

• Miscellaneous expenses

• Interest expense

• Home mortgage interest

• Moving expenses

Education Deductions

• Student loan interest

• Work-related educational expenses

• Teacher educational expenses

Health Care Deductions

• Medical and dental expenses

• Health Savings Account (HSA)

Investment Related Deductions

• Sale of home

• Individual retirement arrangements (IRAs)

• Capital losses

• Bad debt

• Opportunity zones

• Debt forgiven on my residence due to foreclosure, repossession, abandonment or because of a loan modification or short sale