A tax deduction is an item or expense that lowers your overall taxable income. By reducing the amount of income subject to tax, deductions ultimately lower the amount of tax you owe to the IRS or your state.

When you claim a deduction, you don't save the exact amount of the deduction itself. Instead, your tax savings are equal to the deduction multiplied by your tax rate. For example, a $10,000 deduction at a combined 25% tax rate saves you exactly $2,500 in taxes.

Common deductions for individuals include the standard deduction, contributions to traditional IRAs, 401(k)s, and HSA accounts. For business owners, common deductions include home office expenses, marketing costs, vehicle purchases, and contractor fees.

No. A tax deduction lowers your taxable income, which then lowers your tax bill proportionally based on your tax bracket. A tax credit, on the other hand, is a dollar-for-dollar reduction of your final tax bill itself (which makes credits highly valuable!).

Yes! Proper tax planning requires a year-round strategy. Our professionals help you find every eligible deduction, structure your business appropriately, and implement tax-saving strategies to keep more of your hard-earned money.