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Video: How to Get All The Tax Deductions Possible When Filing

Updated for Tax Year 2014


OVERVIEW

Familiarizing yourself with IRS tax deductions will greatly help increase your tax return. The more deductions you can report, the lower your taxable income will be.


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Hello, I’m Lisa from TurboTax with some important information about maximizing your tax deductions this year. Unfortunately, there is no secret formula for taking all possible tax deductions on your return. If there is anything consistent about the tax law, it’s that you must incur an actual expense and satisfy a number of requirements before you can report a deduction on your return. But there are things you can do to insure you don’t overlook a deduction that you’re eligible for.

First, it helps to familiarize yourself with each deduction the tax law allows for. This will help ensure that you track the right expenses and keep the right receipts. Learning about every IRS tax deduction may seem like a daunting task, but it isn’t. If you obtain a copy of a 1040 form, you can use it as a roadmap to all tax deductions.

The first thing you can do is scan through the first page of the 1040. Here you will find a list of all possible deductions you can take when calculating your adjusted gross income—all of which are available regardless of whether you itemize or claim the standard deduction. As you browse through the section, the name of each deduction should provide you with sufficient detail to make an initial assessment of your eligibility for it. Once you narrow down the list, you can read through the 1040 instructions to find each deduction’s specific eligibility requirements.

When you move on to the second page of the 1040, there is a line to report itemized deductions. As the 1040 indicates, itemizing deductions requires preparation of the Schedule A—and this form, as well as the instructions to it, will list every possible expense you can include. And unlike the deductions on the first page of your 1040, evaluating whether itemizing is beneficial requires you to calculate the sum of your itemized expenses and compare it to your standard deduction. This is because the IRS allows you to choose the larger of the two deductions.

When you use TurboTax to prepare your taxes, we’ll do the math and recommend the better choice. Ultimately, the more deductions you can report on your tax return, the lower your taxable income will be. And the lower your taxable income is, the less income tax you will owe.

When you use TurboTax Deluxe and above, you don’t need to know a thing about tax deductions. We’ll ask you simple questions about your life and tax situation and search over 350 deductions and credits to find the ones you qualify for.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

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