Search

Understanding tax deductions and tax breaks

  • What are tax deductions?

    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. 

  • What are tax breaks?

    Tax breaks or credits reduce the amount of tax you owe — or increase your tax refund — dollar for dollar. Certain credits may give you a refund even if you don't owe any tax.

     

    Types of credits

    • Family and Dependent Credits:
      • Child Tax Credit
      • Dependent Care Credit
      • Adoption Credit
    • Income and Savings Credits:
      • Earned Income Tax Credit
      • Saver's Credit (Retirement Savings Contributions Credit)
      • Foreign Tax Credit
      • Excess Social Security and RRTA tax withheld
      • Credit for Tax on Undistributed Capital Gain
      • Credit for Prior Year Minimum Tax
    • Homeowner Credits
    • Electric Vehicle Credits
    • Healthcare Credits:
      • Premium Tax Credit
    • Education Credits:
      • American Opportunity Credit and Lifetime Learning Credit

    You can learn more about deductions and credits in this article.

  • Have a question about your specific tax situation?

    Understanding taxes can be quite a challenge. However, our goal at Keeper is to simplify this process for individuals who aren't tax experts. We've developed this resource specifically for this purpose — to offer you free access to our knowledgeable tax accountants.

    Feel free to submit your tax-related queries here — selected questions may get published.