![]() In this way, they directly reduce the amount of tax that you owe. Tax deductions help reduce your income when calculating your income taxes. Most taxpayers wind up using the standard deduction because it can be hard to find more than $12,950 in itemized deductions. ![]() If your goal is to pay the smallest amount in taxes possible, you should choose the deduction that reduces your income the most. You can choose to use either itemized deductions or the standard deduction - you cannot use both. For 2023 taxes (due in spring 2024), the standard deuction rises to $13,850 for single taxpayers or those married filing separately for married couples filing jointly, the standard deduction rises to $27,700. For 2022 taxes (due in spring 2023), the standard deduction is $12,950 for those who are single or married filing separately for married couples filing jointly, the standard deduction is $25,900. ![]() Itemized deductions are different from the standard deduction, which is a flat amount that a person can deduct from their income when calculating their taxes owed. With itemized deductions, you give the government a list of your qualifying expenses, and the government lets you pay less in taxes. You see a list of all of the food and drinks you ordered and how much they cost. It’s like receiving a bill at a restaurant. Itemized deductions are itemized because you have to specifically note the expense(s) you’re deducting and the amount that you’re deducting for each expense. Tax deductions let you subtract amounts from your income when calculating your income tax owed, so a tax deduction allows you to pay less tax. An itemized deduction is a tax deduction that you can take for specific purchases or expenses.
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