Definition of 'Deduction'
Itemized deductions are specific expenses that you can claim, such as medical expenses, mortgage interest, and charitable contributions. The standard deduction is a set amount that you can claim regardless of your actual expenses.
The amount of your deduction will depend on your filing status and your income. You can find more information about deductions on the IRS website.
Here are some examples of deductions:
* Medical expenses: You can deduct medical expenses that you paid for yourself, your spouse, or your dependents. You can deduct medical expenses that are not reimbursed by insurance.
* Mortgage interest: You can deduct the interest you pay on your mortgage. You can also deduct interest on home equity loans and lines of credit.
* Charitable contributions: You can deduct charitable contributions that you make to qualified organizations.
You can claim itemized deductions if your total itemized deductions are more than the standard deduction. If your total itemized deductions are less than the standard deduction, you will claim the standard deduction instead.
Deductions can help you lower your taxable income, which can lead to lower taxes. However, it is important to keep in mind that not all expenses are deductible. You should consult with a tax professional to make sure that you are claiming all of the deductions that you are entitled to.
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