Rightful Ways of Reducing Your Taxes

For many, especially those who are non-accountants and non-tax attorneys, tax time and understanding our deductions is a tall order. We are torn between taking the standard deductions or itemizing them. Let us try to examine what the common deductions are, how these are defined, how to identify if you qualify and how to benefit from these. When the water gets murky, you can always consult an accountant for more detailed IRS help.

Tax deductions are useful in reducing your total taxable income as they are expenses subtracted from your gross income. Tax deductions are incurred by a taxpayer from a number of reasons and purposes.

Standardized and Itemized deductions are the two kinds of tax deductions. Standard deductions, which are dependent on a person's civil status: single, married, head of household, are fixed amounts subtracted from the gross income. This article will, on the other hand, focus on itemized deduction, which is a corresponding amount for certain pre-determined expenses. Asking for IRS or professional assistance will surely be of great help if you are in doubt as to which type of deduction you can file for.

You can also take advantage of tax credits, which can be obtained from a variety of reasons like having children, adopting children, paying college tuition, earned income tax credit and energy efficiency. Unlike tax deductions, these are taken from your total taxable income. Guidelines in checking for your eligibility to certain tax credits can be found in the tax forms and IRS website

Here are some of the most common tax deductions that we can avail of:

* Professional and business-related association fees
* Costs of job-hunting
* Job agency fees
* Fees for professional books and publications
* Union fees
* Business attire and uniforms
* Home and office expenses
* Alimony and other legal fees to collect taxable income
* Tax preparation and advice charges
* Moving to a new job expenses
* IRA set-up and administration fees
* Other legal fees
* Charitable donations
* Business liability costs and insurance premiums
* Tuition fees for job-related classes

To avoid overpayment, it is important that you look for IRS assistance when calculating your taxes. Should you opt to do it on your own, read the IRS booklet, utilize the online tax preparation service and contact the IRS for assistance in your itemization.

How do you avail of these deductions? For manual computation of taxes, notes in the instruction booklet will help you determine your eligibility. 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 qualify for IRS help is also available through their list of miscellaneous deductions posted online.

Increasing the amount for refund or reducing the amount of taxes due are lawfully addressed through tax deductions. To ensure that you are claiming all the deductions to which you are eligible to - or not mistakenly claiming for deductions- IRS assistance or expert help is always helpful. Otherwise, take time to conscientiously go over the instructions in your booklet. In reality, many have overpaid, so be mindful of the deductions that you are entitled to.