What are tax deductions?

Tax deductions are expenses or allowances that reduce a taxpayer's taxable income, thereby lowering the amount of income subject to taxation. They can include various expenses such as mortgage interest, medical expenses, charitable contributions, and certain business expenses, either through itemized deductions or the standard deduction.

What expenses are tax deductible?

Common tax deductions include charitable donations, mortgage interest, medical expenses, education expenses, and business expenses. Are there limits on tax deductions?

Do tax deductions reduce taxable income?

Remember, tax deductions only reduce taxable income. The good news is you don’t have to choose between tax deductions or credits. If eligible, you can receive both tax credits and deductions to help lower your overall tax obligation. There are several tax credits available to you if you qualify, ranging from education to energy-saving items.