The more you know about tax law, the easier it can be to take all the qualified deductions and, thus, pay lower taxes. As intimidating as it might be to learn about the tax code, there are definite benefits. There are many possible items to deduct.  You can learn about the tax code by reading the Internal Revenue Service (IRS) Web site at www.irs.gov.

As your life circumstances change, make sure to check out expenses you might be eligible to deduct. For example, if your child starts college and you are paying for their education, it might be possible to reduce the amount of your taxable income, up to $4,000, by deducting the tuition and fees paid. Learn more by reading Internal Revenue Service (IRS) Publication 970, Tax Benefits for Education.

Itemizing Deductions

Gain an understanding of some of the more common itemized deductions and save money by using the following informational items from the IRS Web site:

--    Medical and Dental Expenses IRS Topic 502

--    Charitable Donations – IRS Publication 526

--    Employee Business Expenses – IRS Topic 514

--    Business Use of Home – IRS Topic 509

--    Educational Expenses – IRS Topic 513

--    Deductions on Real Estate

            -Home mortgage interest deductions IRS Publication 936

            -Home mortgage points IRS Topic 504

Standard Deductions

Each year there is a set amount that you can take as a standard deduction. Be aware that there are other deductions you might be missing, because you believe you are not eligible (due to not itemizing). Here are some additional deductions to take in addition to your standard deduction:

--    Education deductions and credits; student loan interest deduction; tuition and fees for higher education

--    Saver’s credit

--    Employer plans such as 125/Cafeteria plans and 401(k)s

--    Child tax credit

--    Dependent care credit

--    Earned income tax credit

--    State and local real property taxes

--    Personal disaster loss incurred in a federally-declared disaster area

--    Moving expenses

--    Military reservists’ deduction

--    Deductions for the self-employed

Tax code changes take place every year, so check the IRS Web site throughout the year to see what is new. For instance, if they are offering a tax credit on energy efficient windows for a limited period of time, and you need new windows, try to buy them during this time.

For more information try: IRS Frequently Asked Questions (www.irs.gov/faqs/index.html?portlet=5) and 1040 Central – What’s New (www.irs.gov/individuals/article/0,,id=118506,00.html).