Reduce 2012 Taxes with Tax Deductions

What Is a Tax Deduction?

A tax deduction reduces your taxable income. It can also help you increase your tax refund.

Tax deductions are similar to tax credits. Credits can help you reduce your tax payments. Learn more about tax credits.

What Is Tax Deductible?

Find out what is tax deductible before you prepare and efile your 2012 Federal Tax Return.

We will keep this page updated with the latest tax help topics, such as tax savings, the latest available tax deductions, and other money-saving tax return tips.

Which Tax Deductions Can I Claim on My Tax Return?

The tax deductions might apply to you depend on your current life situation. Find out which life-changing events and other life situations that can affect the deductions you qualify to claim on your tax return:

Life-Changing Events Can Result in Tax Deductible Expenses

Did you lose your job? Job loss expenses might be tax deductible.

Did you search for a new job? Turn job search expenses into tax deductions.

Did you get married? Marriage may actually save you money on taxes.

Did you get divorced or separated? This might also affect your tax return.

Did you have a child? Children or other dependents can mean tax credits and deductions.

Did you adopt a child? Adoption expenses can be deductible.

Did you go to college? Find information about tax deductible education expenses.

Other Tax Deductible Expenses and Tax Deduction Tips

Did you have medical expenses? Review our list of medical deductions and medical expenses checklist to see which medical expenses you can itemize on your tax return.

Did you make charitable donations? You can claim tax deductions for contributions made to qualifed charities and non-profit organizations.

Do you have other miscellaneous expenses? You can claim tax deductions for unreimbursed employee expenses, tax preparation fees, and other expenses.

Not sure if an expense is tax deductable or not? Check out our summary of non-deductible expenses before you attempt to claim it on your tax return.

If you're not sure whether your gross income is taxable or not, we have a list of various types of taxable income.

Tax Deductions for Tax Year 2012

In order to claim most tax deductions (except some retirement contributions) for the current Tax Year, the expenses or payments have to occur during the Tax Year or no later than Dec. 31.

Please review these major tax deduction areas as they might apply to your current life situation or circumstance:

Tax Deductions for Families and Parents Tax Deductions for Homeowners

Tax Deductions for Employees/Workers Medical Tax Deductions

Student Tax Deductions Retirement Tax Deductions

Seasonal Tax Deductions Green Energy Tax Deductions

Miscellaneous/Other Tax Deductions

ATTENTION: There are specific items that you cannot deduct from your taxes, such as home repairs and political contributions. Learn more about nondeductible expenses.

Tax Deductions for Families and Parents

If you got married by December 31, you may qualify for a marriage tax deduction and other marriage tax benefits.
There are tax deductions for divorced and separated individuals available if you became divorced or separated by the end of the year.
You can claim a child as a dependent on your tax return if he or she is a qualifying child or qualifying relative. Not sure if the child qualifies as a dependent? Use the FREE DEPENDucator dependent tax tool to determine whether he or she is a qualifying child or qualifying relative.
If you have child care expenses, you may be able to deduct child care from your taxes.
If you have children that qualify as your dependents, you can claim a tax exemption for each person.
If you adopted a child, you may be able to deduct adoption expenses.

More tax deductions, credits for parents with dependents or children

Tax Deductions for Homeowners

If you own a home and a home mortgage, there are home tax deductions that might apply to you.
Learn about the rules on home office deductions if you work from home.
Take advantage of various estate tax deductions to reduce the amount of estate tax you may owe.

Tax Deductions for Employees/Workers

On-the-Job Tax Deductions

You can deduct your vehicle expenses if you are using your car for qualified business, medical, or charitable purposes.
You can deduct special work or job expenses as miscellaneous itemized deductions.
If you have unreimbursed employee expenses, you can claim them as miscellaneous deductions.
There are military and armed forces related tax deduction options available if you are a member of the Armed Forces or a military personnel.
There are additional employee deductions for various types of workers.

Job Loss, Job Search, and Taxes

If you searched for a new job during the year, you may be able to deduct job search expenses and reduce your taxes.
If you lost your job, you may be able to deduct certain expenses related to your job loss.

Self-Employed Workers, Employees

If you are self-employed, you may be able to claim certain self-employment deductions.
Check out our list of employee expenses you might be able to deduct.

Medical Tax Deductions

If you are enrolled in a government health program (health savings, medical savings, and flexible spending accounts), you can deduct and itemize medical expenses that are either contributions you have made to your health plan or are not covered by your health plan.
Check out our list of various medical deductions and medical expenses you can claim on your 2012 Tax Return.

Student Tax Deductions

If you are a student and have paid your education expenses on your own, there are two student tax deductions available: the student loan interest deduction (if you paid back student loans) and the tuition and fees deduction (if you paid college tuition and fees).

efile Tax Tip: Check out our dedicated student page that lists many student tax related topics. It's a must for any student.

Retirement Tax Deductions

If you contribute to a retirement plan, you may be able to take a deduction for an individual retirement account (IRA) contribution. To claim it, you do not have to itemize deductions.

In addition, you may be able to claim an additional credit for those same retirement contributions to reduce your income tax dollar-for-dollar. However, there are various pension plan limitations. Learn more about the saver's credit for retirement savings contributions.

Seasonal Tax Deductions

Many people usually do not think about taxes during the summer months, but thinking a little about tax deductions during this time could help taxpayers save a lot of money when tax season arrives in January. We have a complete list of summer tax deductions and tips to consider.
Before you ring in the New Year, review our list of tax deductions to claim by December 31.

Green Energy Tax Deductions

Though there are no tax deductions for green energy-related expenses, individuals can still get green tax savings by claiming green energy tax credits.

Miscellaneous/Other Tax Deductions

You can deduct any cash contributions you make, as well as deduct the fair-market-value of any donated property, such as household items, clothing, or vehicles. Learn more about charitable donations and deductions.
You may be able to deduct gambling losses as an itemized deduction.
U.S. citizens and resident aliens from the United States working or living in a foreign country during the year are allowed the same tax deductions as U.S. citizens and residents from the U.S. living in the United States. Check out our detailed summary on deductions for Americans living or working abroad.
You can deduct capital losses if your long-term capital losses on investment property are more than your capital gains for the year.
Taxpayers have been allowed to claim unusual tax breaks and deductions over the years!

When Should I Plan to Claim These Tax Deductions on My Tax Return?

It is important to plan now and act during the year. These tax breaks provide a financial boost for many taxpayers in different life situations.

These tax changes will impact Tax Year 2012 Individual Income Tax Returns (due by April 15, 2013). Please check back often since we will post more details about these tax changes as they become available.

Should I Itemize My Deductions or Take the Standard Deduction?

Itemized deductions are particular expenses that you can use to lower your taxes. You should only itemize if the total amount of your itemized deductions is more than your standard deduction amount.

If you do not itemize deductions or if the total of your itemized deductions does not exceed the federal standard deduction amount (which varies based on filing status), you should claim the standard deduction on your tax return.

Visit our detailed summary on itemized deductions and the standard deduction to decide type of deduction is right for your tax situation.

Not itemizing your deductions? Review our list of federal standard deductions.

Are There Expenses I Cannot Deduct From My Taxes?

Yes, there are certain expenses you cannot deduct from your taxes. Check out our lists below for various nondeductible expenses-it could save you from receiving a tax audit.

Not sure if a certain expense can be deducted from your taxes? We have a complete list of expenses that do not qualify as tax deductions.
For workers or employees, there are numerous employment or job expenses that might NOT be deductible.

What Tax Deductions Have Expired?

Every Tax Year, the tax laws often change. As a result of rewritten tax rules, tax breaks change or expire. In addition, dollar amounts are adjusted every year to adapt to the new laws.

For the upcoming tax season, there are many tax breaks (including deductions) that have expired or changed on December 31, 2011. This means that you cannot claim them on your 2012 Tax Return, unless Congress takes action to renew or retroactively extend them.

Review our complete list of changed or expired tax laws that could affect your 2012 Tax Return or previous year Tax Return(s).

How Will I Know Which Tax Deductions Are Right For Me?

Let the efile.com tax preparation and efile software find all the deductions for you. This is a reminder that enables you to think about expenses or tax credits that might apply to your tax return. Before you prepare your tax return and as a tax preparation planning tool, please learn more about the common tax deduction and tax credit options listed here. Remember that every eligible tax deduction or tax credit will either increase your tax refund or reduce the taxes that you owe.

Use our tax return preparation and tax deduction checklist to line up all the deductions you're claiming on your 2012 Tax Return.

General Tax Tips: Deductible Expenses, Filing Tax Returns, Saving Money, & Paying Taxes

There are other ways to gain more tax savings besides claiming tax deductions. The following income tax tips could also help you save money on your taxes:

Adjust Your W-4 Paycheck Withholding

Not sure what you should enter on your W-4 form? Make sure you are not having too little or too much tax withheld from your paycheck.

Learn more about adjusting your paycheck withholding

Do You Have to File an Income Tax Return?

Find out which income amounts require you to file or efile a tax return and why you might want to even if you owe no taxes.

Learn more about the requirements for filing a tax return

Choose the Right Income Tax Filing Status

Your tax filing status must be decided before you can calculate your correct tax rate, deduction amounts, and filing requirements. Your income tax filing status generally can be divided into Married and Unmarried (Single, Widow, Head-of-Household). Whether you may file as married or unmarried depends on your legal marriage status on the last day of the tax year, December 31. There are five filing options, each with its own specific qualifications and consequences.

Learn more about tax filing statuses

Know Your Federal Standard Deduction

If you do not itemize deductions or if the total of your itemized deductions does not exceed the federal standard deduction amount, you should claim the standard deduction on your tax return.

Learn more about the Federal Standard Deduction

Find Ways to Save Tax Money

Tax loopholes are not only for big businesses and savvy tax attorneys. Read about ways to save money on taxes--from charitable giving to income deductions that the IRS cannot tax.

Learn more about tax loopholes and more ways to save money on taxes

Find Tax Exemptions

Tax exemptions are similar to deductions--they reduce your taxable income for the year. Exemptions are divided into two categories: personal exemptions and dependent exemptions.

Learn more about tax exemptions

Find Tax Credits

Tax credits are even better than tax deductions! Credits reduce your taxes dollar-for-dollar and some tax credits are even refundable. A refundable credit will be paid to you in a tax refund if you owe no taxes.

Learn about federal tax credits

Owe Taxes? Have Difficulty Paying Taxes?

The IRS has continued to assure taxpayers that it will balance its responsibility to enforce the tax laws with the realities of the current economic climate. All IRS staff has been given a greater degree of flexibility to help taxpayers who are struggling to pay their income taxes.

Learn more about owing taxes and what to do about paying them

Know the Mileage Deduction Rates

If you use your vehicle to commute to work or for other business purposes, you may be able to deduct a set amount for each mile driven. There are also standard mileage rates for vehicle use in the service of charity, for the purposes of moving to be closer to a job, and for qualified medical use.

Find out the latest standard mileage rates

Make Sure You Get Your Tax Refund!

Every year for the last few years, over 100,000 tax refund checks have been returned to the IRS as undeliverable. Why? Because they were sent to incorrect or outdated mailing addresses. The average amount of these checks is about $1,140. Is one of these tax refund checks for you? If you are the intended recipient of one of these returned checks, all you have to do is update your address with the IRS. The IRS encourages taxpayers to efile their returns and use direct deposit to receive their refunds. Electronic filing and direct deposit help reduce errors, increase the speed of tax refunds, and eliminate the problem of undeliverable refund checks.

New, Free eFile Tax Tools-Taxucate Yourself & Taximate Your Deductions!

To help you find out which tax deductions you qualify for, we offer an assortment of free, online tax tools. All of the following easy-to-use tax educator and tax estimator web tools are FREE of charge!

FREE efile Tax Educator Tools

These tools are great to optimize your tax return. Simply answer a few easy questions and get results immediately.

Use our "DEPENDucator" (qualifying child dependent tool) to help you determine if a qualifying child can be a dependent on your tax return.
Did you know that you could claim a qualifying relative (grandchild, parent, significant other, etc.) as a dependent on your tax return? Use our "RELucator" (qualifying relative tool) to find out whether someone counts as your qualifying relative or not.
Are you a HOH (Head of Household)? Our "HOHucator" (head of household (HOH) qualifying person tool) will assist you in determining if you have a qualifying person to use for the HOH tax return filing status.
You might qualify for the Earned Income Tax Credit (EIC or EITC) if you work for a living but only earn a modest income. The "EICucator" (the Earned Income Credit tool) will let you know whether or not you can claim it.
If you have dependent children, you may be able to get the Child Tax Credit! Use our "KIDucator" (Child Tax Credit tool) to find out if you qualify for the credit.

FREE efile Tax Calculator & Tax Estimator Tools

After you have used all of the above Tax Educator Tools, you can estimate your 2012 tax refund, or how much you will owe to the IRS, by using our "TaxStimator" (tax refund estimator, tax calculator).

Taxucate and Taximate with our eFile Tax Tools for easier tax return preparation!