Deductions and adjustments reduce the amount of income that ultimately gets taxed. This section is useful when you are comparing broad deduction types or trying to understand why two taxpayers with the same income can end up with different taxable income.
- Above-the-Line Deduction
An above-the-line deduction is a deduction taken before taxable income is computed and commonly affects adjusted gross income directly.
- Actual Expense Method
The actual expense method calculates deductible vehicle costs from the actual operating expenses attributable to qualifying use.
- Alimony Deduction
The alimony deduction is the deduction for qualifying alimony payments under federal rules that still apply to certain older agreements.
- Business Expense Deduction
A business expense deduction is the deduction concept tied to qualifying business costs that reduce business profit on the return.
- Casualty Loss Deduction
The casualty loss deduction is the itemized deduction for certain sudden property losses, generally limited for individuals under current federal rules.
- Charitable Contribution Carryover
A charitable contribution carryover is the unused portion of deductible charitable contributions carried into a later tax year.
- Charitable Contribution Deduction
The charitable contribution deduction is the deduction concept tied to qualifying charitable gifts and often comes up in itemizing discussions.
- Educator Expense Deduction
The educator expense deduction is an AGI-stage deduction for eligible classroom expenses paid by qualifying educators.
- Excess Business Loss Limitation
The excess business loss limitation is the rule that can cap how much business loss an individual may use in the current year.
- Gambling Loss Deduction
The gambling loss deduction is the itemized deduction that can allow qualifying gambling losses up to the amount of gambling winnings.
- Health Savings Account Deduction
The health savings account deduction is an AGI-stage deduction for eligible HSA contributions.
- Home Office Deduction
The home office deduction is the deduction for eligible business use of a home by qualifying self-employed taxpayers.
- IRA Deduction
The IRA deduction is the deduction for eligible traditional IRA contributions and can reduce AGI before taxable income is computed.
- Itemized Deduction
An itemized deduction is a deduction claimed by listing qualifying expense categories instead of using the fixed standard deduction.
- Medical Expense Deduction
The medical expense deduction is an itemized deduction for qualifying unreimbursed medical costs above the applicable AGI threshold.
- Mortgage Interest Deduction
The mortgage interest deduction is the deduction concept tied to qualifying mortgage interest and is commonly part of itemized-deduction discussions.
- Moving Expense Deduction
The moving expense deduction is the deduction for qualifying moving costs that remains limited under current federal law.
- Ordinary and Necessary Expense
An ordinary and necessary expense is a business expense standard used to determine whether a cost is deductible in carrying on a trade or business.
- Penalty on Early Withdrawal Deduction
The penalty on early withdrawal deduction is the AGI-stage deduction for certain bank or savings withdrawal penalties reported as income adjustments.
- Principal Place of Business
Principal place of business is the main business location test that often determines whether a home office qualifies for a deduction.
- Recordkeeping
Recordkeeping is the practice of preserving the documents and logs needed to support tax deductions, basis, and other return positions.
- SALT Cap
The SALT cap is the federal limit on the itemized deduction for state and local taxes.
- Self-Employed Health Insurance Deduction
The self-employed health insurance deduction is an AGI-stage deduction for eligible health insurance premiums paid by self-employed taxpayers.
- Self-Employed Retirement Plan Deduction
The self-employed retirement plan deduction is the deduction for eligible contributions to retirement plans maintained by self-employed taxpayers.
- Standard Deduction
The standard deduction is a fixed deduction amount that reduces taxable income without requiring the taxpayer to itemize specific expenses.
- Standard Mileage Rate
The standard mileage rate is the IRS optional per-mile method for computing certain vehicle deductions, updated periodically by the IRS.
- State and Local Tax Deduction
The state and local tax deduction is the Schedule A deduction for qualifying state and local income, sales, and property taxes.
- Student Loan Interest Deduction
The student loan interest deduction is a deduction concept tied to qualifying loan interest and is commonly discussed as an above-the-line deduction.