tax deduction

A tax deduction is a dollar amount subtracted directly from your income that lowers the amount that you are ultimately taxed on for the year, called your “taxable income”. The lower your taxable income, the lower your taxes due.
Tax deductions are based on filing status, life events, and taxable income. There are a few ways to claim deductions, but there is one choice everyone has to make: whether to claim the “standard deduction” or “itemize your deductions” and you’ll want to choose whichever is greater. The standard deduction is a fixed amount that the IRS lets you deduct from your income without providing any additional information. The amount depends on your household/marital status and how you’re filing. Itemizing your deductions essentially means listing each of them out on an additional schedule and you’ll need backup documentation in the event you’re audited.