A tax deduction is a reduction in taxable income that is allowed by the government as an incentive for certain types of expenses. Tax deductions lower the amount of income that is subject to taxation, and therefore, reduce the amount of taxes that a taxpayer must pay.
There are two types of tax deductions: above-the-line deductions and itemized deductions. Above-the-line deductions can be taken regardless of whether a taxpayer chooses to itemize their deductions or claim the standard deduction. Examples of above-the-line deductions include contributions to an IRA, student loan interest, and certain business expenses.

Itemized deductions, on the other hand, are deductions that a taxpayer can only claim if they choose to itemize their deductions. These deductions are calculated by adding up specific expenses, such as charitable donations, mortgage interest, and state and local taxes, and comparing the total to the standard deduction, which is set by the government each year. If the total of the itemized deductions is greater than the standard deduction, the taxpayer can claim the itemized deductions instead.
Examples of common itemized deductions include:

• State and local taxes, including income, sales, and property taxes.
• Mortgage interest on a primary residence.
• Charitable contributions to qualified organizations.
• Medical expenses that exceed a certain percentage of your adjusted gross income.
• Certain miscellaneous expenses, such as job search expenses and tax preparation fees.

It’s important to note that some tax deductions may have limits or phase-out ranges, meaning that they may not be fully deductible if the taxpayer’s income exceeds a certain threshold. Additionally, some deductions may not be available to taxpayers who use the standard deduction instead of itemizing their deductions.
In conclusion, tax deductions are reductions in taxable income that are allowed by the government as an incentive for certain types of expenses. They can lower the amount of taxes that a taxpayer must pay by reducing their taxable income. Tax deductions can be divided into two categories: above-the-line deductions and itemized deductions. Above-the-line deductions can be taken regardless of whether a taxpayer chooses to itemize their deductions or claim the standard deduction, while itemized deductions can only be claimed if the total of the itemized deductions is greater than the standard deduction set by the government each year. Some examples of common tax deductions include state and local taxes, mortgage interest, charitable contributions, medical expenses, and certain miscellaneous expenses. It’s important to keep in mind that some deductions may have limits or phase-out ranges based on the taxpayers income and some deductions may not be available if the taxpayer chooses to use the standard deduction instead of itemizing their deductions. To claim deductions one must have proper records and evidence of the expenses, it’s always better to consult with a tax professional to find out what deductions you qualify for.