Tax deductions lower the amount of income you’re taxed on — leading to a smaller tax bill!
Types of deductions
- Business: Ordinary and necessary work-related purchases
💡 Ordinary and necessary - ‘Ordinary' means it's common in your field. 'Necessary'
means it's 'helpful and appropriate' for doing your work — it doesn't necessarily
have to be indispensable.
- Educational:
- Student loan interest
- Teacher educational expenses
- Healthcare:
- Medical or dental expenses more than 7.5% of your AGI
- Health savings account (HSA)
- Investment:
- 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
-
Personal:
- Deductible non-business taxes
- Personal property tax
- Real estate tax
- Sales tax
- Charitable contributions
- Gambling loss
- Miscellaneous expenses
- Interest expense
- Home mortgage interest
- Moving expenses
- Standard deduction
- Itemized deductions
Want to learn more about what a tax deduction is? Take a look at our blog article.