![]() Not sure which deductions or credits you qualify for? Working with a professional tax adviser could help. Some taxpayers qualify for tax credits, which may directly reduce their tax bill. But keep in mind that itemized deductions may require detailed recordkeeping to reduce the risk of a tax audit. If that happens, they may choose to itemize their deductions. Some taxpayers may have more tax write-offs than those offered with the standard deduction. And a taxpayer’s filing status could determine which standard deduction they receive. The IRS determines the dollar amount for standard deductions. By reducing their taxable income, they could drop to a lower tax bracket. Standard deductions and itemized deductions are two ways taxpayers might be able to lower their taxable income. To find the amount of money taxpayers actually owe the IRS, they need to find their effective-or average-tax rate.
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