Thanks to the complexity of the United States tax codes, the system itself, and the variations of tax codes from state to state, completing your personal tax return and maximizing your deductions and exemptions to their fullest potential, is like trying to complete a mind-twisting maze. The average individual required to file a personal tax return has no grasp of the US tax system, and must therefore rely on one of the many tax professionals to complete their return. Quite often, deductions and exemptions are overlooked simply because of a lack of communication. The following article will discuss the personal deductions available to the individual tax payer, and the fact that qualifying for these deductions must be communicated to the tax preparer.

The really big one that most all taxpayers are familiar with is the standard versus itemized deduction that removes a large amount of the tax liability. The standard deduction is $3200 per personal exemption claimed on the tax return. If you're a taxpayer and spouse, with three children your standard deduction would be $16,000. That's a lot of money to deduct from your tax liability. Again, however most everyone understands how this deduction works, and that the information to accurately configure this deduction is provided at the time of preparation and filing. What about the itemized deduction? Why are we given a choice of standard or itemized? We're given a choice because on the itemized deductions, or Schedule A of the 1040, certain expenses are allowed a deduction that might prove to be a bigger benefit for the taxpayer. What are these allowable deductions?

Medical expenses, certain taxes paid, mortgage interest expense, points paid on your mortgage, charitable gifts, casualty and theft losses, and unreimbursed employee expenses cover the vast majority. Sometimes, the taxpayer's expenses in a certain area for one year exceed what is considered the normal level, and filing itemized deductions creates a bigger savings than the standard deduction allowed. It is for this reason, that the taxpayer must be aware of these deductions, and make the tax preparer aware that an unusual situation exists. The stipulation that exists here is that often the deduction is limited to a percentage of the adjusted gross income.

What other deductions are available to take that directly affect the adjusted gross income? Some of these are not as well known, yet have a bigger impact on the amount of tax liability you will incur based on your individual tax return. Educator expenses or expenses you incur as a teacher in the education system are deductible to a certain level and are not restricted by the percentage rules of the itemized deductions. Health savings accounts, medical savings accounts, and individual retirement accounts are other deductions that are applied on a dollar for dollar basis. If you happen to be among the nations self-employed, there are additional deductions for an SEP, or self-employed pension fund, health insurance premiums expense, and one-half of your self-employment tax that remove tax liability, dollar for dollar spent. Are you a student that pays student loan interest, or part of your qualified tuition and fees? Then you're also eligible for a dollar for dollar deduction. This has proven to be an exceptionally wonderful benefit for many of the non-traditional students returning to school in their thirties and forties, that struggle to pay tuition and fees. This is also deductible if you paid these expenses for a dependent child to attend college. The only thing to make sure that you guard against is double deduction. Don't take the deduction if your child is taking the deduction on their tax return. Generally, however, if a parent is providing the support for their child to attend college, the child doesn't file a tax return at all; usually they're still being claimed as a dependent.

Did you have to move this year, in order to keep your job? Did you take a new job that required you to move? Moving expenses is also a tax deduction that is tremendously overlooked, and not taken as a deduction. Why? Generally, the deduction is taken because many of the individual taxpayers that would qualify for the deduction simply aren't aware that the deduction exists.

As you ready yourself for the "blow" of the tax man's axe, keep in mind that we often can reduce the burden of our tax liability simply by educating ourselves about the basic information we should provide to our tax preparers. The better job we do in providing them with information, the better job they can do with providing us a refund!

About the author:

Tony Robinson is a Webmaster and International Author. Visit http://www.tax-portal.com/ for his tax tips.