Standard Tax Deductions

 

Getting a bigger refund with standard tax deductions using online tax software.

Tax payers elect to file the 1040EZ form because it is easier, but they are missing out on standard income tax deductions that can give them a much larger income tax return. Read on to see what the usual income tax deductions there are, and see if you are claiming all of them.

If you decide to skip all the income tax deductions and file a 1040EZ tax return, you will be given a standard deduction based on your filing status. This is the amount that gets deducted from your income before determining how much tax you should have paid.

 

If you don’t have a mortgage or any other tax deductible expenses, this is probably the ideal way to go but, if you have deductions, you could be costing yourself tons of money.

Deductions

There are tons of legal income tax deductions you can claim, especially if you have a small business.

 

The following are deductions most people can take.

• The first deduction is based on how many people are in your household. For each person you get to deduct a certain amount from your income.

• The next deduction most people can take is mortgage interest. If you own your own home, the amount of money you pay every month on interest can be deducted from your income.

• If you donate to charity, and most people do, you can deduct this as well. That means that all the money you donate to your church every Sunday reduces the amount of taxes you have to pay.

• Student loans are another common source of income tax deductions. You are allowed to deduct the interest portion of your student loans.

• Other deductions that are less common include medical expenses

• Expenses related to child care, but you should really consult a tax professional if you plan to go beyond the usual deductions.

Hopefully this quick list of income tax deductions will help you to identify all the things you can deduct from your income to reduce the amount of money you owe the government.

I recommend automated software because it is very good at reminding you of things that you can legally deduct, but won’t let you accidentally do things that will get you in trouble..

Standard Income Tax Deductions
February 21st, 2009 . by admin Posted in income tax |
Tagged With: income tax deductions • standard income tax deductions

Standard deductions are a fixed dollar amount that reduces the amount of income on which you pay tax on your tax return.

 

 

The amount of the basic standard deduction depends upon your tax return filing status. However, if you can be claimed as a dependent on someone else’s tax return, your standard deduction amount may be different.

 

In some cases, the standard deduction on your tax return can consist of two parts, the basic standard deduction, and an additional standard deduction amount for age, blindness, or both.

 

You are allowed one tax exemption for each person you can claim as a dependent on your tax return. In order to claim a dependent on your tax return there are five tests you must meet:

Member of Household or Relationship Test
Gross Income Test
Support Test
Joint Return Test
Citizenship Test

 

Generally you are allowed one tax exemption for yourself and, if you are married one tax exemption for your spouse. Plus, if you have dependents, one tax exemption for each dependent on your tax return. Personal tax exemptions reduce your taxable income on your tax return for each personal tax exemption you claim. Using today's online tax software will help you ensure that your getting every tax deduction.

 

Posted in income tax deductions: February 21st, 2009 . by admin

 

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