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Deductions: Standard, Itemized,
Above-the-Line, Business

Standard Deduction: a fixed amount that reduces the income on which you are taxed based on filing status.

If itemized deductions are more than the standard deduction, itemizing will save you more.

You can claim above-the-line deductions whether you itemize or not.

Schedule C filers may qualify for additional deductions.

Deductions allow you to reduce your taxable income and also your tax bill. A deduction differs from a credit, which is applied directly to your tax bill, reducing it dollar for dollar. There are 4 major categories of deductions.

Should I Itemize? Topic 501
Medical and Dental Expenses Topic 502
Deductible Taxes Topic 503
Home Mortgage Points
Topic 504
Interest Expense Topic 505
Contributions Topic 506
Miscellaneous Expenses Topic 508
Business Use of Home Topic 509
Business Use of Car Topic 510
Business Travel Expenses Topic 511
Business Entertainment Expenses Topic 512
Educational Expenses Topic 513
Employee Business Expenses Topic 514
Casualty, Disaster, and Theft Losses Topic 515

Itemized Deductions

Certain kinds of deductions are called itemized deductions. If you have enough of them to beat the standard deduction, it's usually a good idea to itemize.

For most taxpayers, purchasing a home makes itemizing worthwhile. Here are some other popular itemized deductions from the IRS

Above-the-line Deductions

If you qualify, you can claim these deductions even if you don't itemize.

Self-employment above-the-line deductions:

Schedule C Business Deductions

If you own your own business, some additional deductions apply to you. These are claimed directly on your business schedule, called a Schedule C. Farmers and owners of rental property use Schedule E.

Deductions include

For other deductible items, see schedules C and E. There are many rules and limitations pertaining to some of these deductions.