Deductions help reduce the amount of income you’re taxed on.
Because of itemized deduction caps and the standard deduction increase, the standard deduction gives almost 90% of tax filers the biggest tax break.
It’s a fixed dollar amount based on your filing status and age, that is taken off of your taxable income.
Think of it like a deduction “bundle” that gives you a single, lump-sum discount according to your tax situation.
The other option is to itemize your deductions.
This means listing each individual deduction you qualify for, and taking that respective amount off your taxable income.
It’s like taking deductions “a la carte”— you pick the ones that apply to you, enter your info, and take each separate discount.
Without making you type in a lot of details, we’ll ask you questions about a few things, like student loan interest, car registration fees, and property tax.
Answer each question accordingly.
We’ll determine which deduction is best for you and look for other opportunities to maximize your refund.
For more answers to your questions, visit TurboTax.com/support