July 28, 2017
Paying more than you ought to the IRS, is something every individual or business owner will try to avoid, and while everyone must pay their taxes, understanding some common tax exemptions and deductions, can help minimize the total and ensure that the end amount is accurate.
What are tax exemptions?
A tax exemption is money that you’ve lawfully earned, but which you don’t have to pay taxes on, and they differ to tax deductions.
If you claim every exemption that you qualify for, you can significantly reduce your tax bill, and the amount that you’re allowed to claim, is dependent on your filing status.
What are tax deductions?
There are two types of deductions, 'standard deductions' and 'itemized deductions'. If you choose to file a standard deduction, then the amount will be based upon your filing status.
You may not always be eligible to file a standard deduction, but if you are able to, then you may be able to save money by itemizing your deductions.
Itemized deductions can get complicated, so to avoid missing out or incurring costly penalties, it would be wise to hire the services of a tax professional.
Here are a few common itemized deductions:
Taxes can be complicated whichever way you approach them, but hiring the services of a tax professional will ensure that you get every deduction and exemption that you are eligible for.
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