What Tax Deductions Can You Rightfully Claim?

Tax time and understanding our deductions can be a daunting task for some, especially non-accountants and non-tax attorneys. We are torn between taking the standard deductions or itemizing them. Let's try to explain what the usual deductions are, how these are defined, how to identify if you qualify and how to benefit from these. When the water gets unclear, you can always consult an accountant for more specific IRS assistance.

Tax deductions are useful in reducing your total taxable income as they are expenses taken from your gross income. Expenses incurred from a variety of reasons can be considered as tax deductions.

There are two types of deductions: the standard deduction and the itemized deduction. A standard deduction is a single dollar amount that is taken from your gross income to determine your taxable income. This amount differs for married couples, singles and heads of households. The other type, which we will look at more closely, occurs when taxpayers claim for deductions for certain expenses that they have incurred. If you are not sure of the deductions that you can avail of, you can always get IRS or private assistance.

You can also utilize tax credits, which are different from deductions. Certain expenses like having children, adopting children, paying college tuition, and energy efficiency, among others, qualify you to a tax credit. Instructions on your tax forms or those found on the net will help you determine if you are qualified for a certain tax credit. Credits are different from deductions in the sense that the former are deducted from the total taxable income, not the gross income.

Presented hereafter are some of the common tax deductions:

* Professional and business-related association fees
* Costs of job-hunting
* Fees for job agencies
* Fees for professional books and magazines
* Union dues
* Business attire and uniforms
* Home and office expenses
* Legal fees to collect taxable income, such as alimony
* Tax preparation and advice charges
* Costs Incurred from moving to a new job
* IRA set-up and administration fees
* Some legal fees
* Donations to charitable institutions
* Business liability insurance premiums
* Tuition fees for classes taken to perform better in your job

When you are computing your taxes, it is useful to get IRS assistance so you don't overpay your taxes. Should you opt to do it on your own, refer to the IRS booklet, utilize the online tax preparation system and get in touch with the IRS for assistance in your itemization.

How do you qualify for these deductions? If you are doing your taxes in hard copy, then the instruction booklet will have guidelines that will help you identify if you qualify for these deductions. If you go online, the system will help you through the process. A professional tax preparer will also be a useful resource for checking for the deductions you are entitled to. IRS help is also available through their list of miscellaneous deductions posted online.

Claiming for your tax deductions and tax credits are lawful ways of minimizing taxes and augmenting refund. A number of taxpayers actually pay more than they should, thus it is imperative that you have all the necessary information in calculating for your taxes. To reiterate, it is worthwhile to keep in mind that professional services and booklet instructions are readily available to ascertain that your tax settlement experience is a positive one.