Did you know you can lower the taxes you pay? It's all about tax deductions and credits! Tax season is coming, so let's learn about them.
- A tax deduction lowers the amount of money you pay taxes on. Think of it like a discount!
- A tax credit directly reduces the amount of tax you owe. It's like getting some money back.
- Most people use the standard deduction, a set amount everyone gets.
- Some people use itemized deductions. They list all their eligible expenses to reduce taxes even more. This is more common for people with higher incomes and lots of expenses.
| Fact | Number |
|---|---|
| Standard deduction (per person, 2025) | $15,000 |
| Average itemized deduction reduction (some states) | >$40,000 |
| Percentage of households who itemize | ~10% |
A financial advisor can help you understand which option is best for you.
