There is a give-away embedded in the tax code called: deductions. When filing personal tax returns, deductions reduce taxable income. Each "personal taxable entity" is given the option of taking a standard deduction or itemized deductions. It is rarely a complicated choice because one chooses the greater of the deduction amounts. However, while not a complicated choice, it does generate some questions about how each are determined.
The standard deduction is available for anyone when filing 2015 Federal return.
What constitute itemized deductions? At the risk of being cavalier, anything on Schedule A. What is schedule A, you ask? It is the IRS sub-schedule of 1040 (literally called Form Schedule A) that helps one compute eligible itemized deductions. Everything listed on sch. A is deductible but some deductible expenses are subject to limits. For example:
Additionally, itemized deductions begin to be phased-out (disallowed) when your income reached a certain level:
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