Like most people, you probably think of deductions as a way to reduce your taxes. But that’s not quite what they are. A deduction is a tax break that allows you to take an amount of money out of your taxable income and use it to lower your overall taxable income.
These Types of Deductions can be Either Personal or Business Deductions
Personal deductions include things:
- Medical expenses (deducting them can help reduce your taxable income by up to 40% if you’re a high-income earner).
- State and local taxes (deducting them can help reduce your taxable income by up to 40%).