A tax deduction is an expense or item that you can subtract from your gross income to reduce your taxable income, ultimately lowering the amount of taxes you owe.
Common tax deductions include:
Deductions can be claimed through either detailed expense reporting or the standard deduction, depending on which offers the greater tax benefit. Proper documentation, such as receipts and records, are important to support your claims in case of an audit.
Understanding and using eligible tax deductions can help you reduce your tax liability and increase your refund or savings.