Deductible taxes are expenses that a taxpayer or business can deduct from their adjusted gross income, which reduces their income, thereby reducing the total tax they must pay.
Most employees use the standard deduction; however, those with very high deductible expenses may choose to “detail” if it results in a smaller tax bill.
The Internal Revenue Service (IRS) provides listings, requirements, and amounts of all available deductibles.
General tax deductions for individuals include student loan interest deductions, self-employment expenses deductions, charitable donation deductions, and mortgage interest deductions.
Business deductions include wages, utilities, rent, rent and other operating expenses.
The American Opportunity Tax Credit (AOTC) helps offset the cost of post-secondary education for students or their parents (if the student is a dependent).
The Earned Income Tax Credit (EITC) is a refundable tax credit used to supplement the wages of low-income workers and help offset the impact of Social Security taxes.
As a result of the Tax Cuts and Jobs Act (TCJA), most taxpayers can now only carry forward net operating losses (NOLs) that occur in tax years after 2017 to a later year.
Form 4684 is the U.S. Internal Revenue Service (IRS) form for reporting profits or losses from accidents and thefts that occur as a result of a federally declared natural disaster that may be deductible for taxpayers who detail deductions.