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Tax Exemptions and How They Work
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Earned Income Tax Credit
A refundable credit for low to moderate-income working individuals and families, particularly those with children.
Home Office Deduction
Deduction for use of a portion of a home exclusively for business purposes, calculated using the simplified option or the regular method.
Medical and Dental Expenses
Deduction for out-of-pocket medical and dental expenses exceeding 7.5% of adjusted gross income (AGI).
Personal Exemption
A set amount that taxpayers could subtract from their income for themselves and their dependents. As of 2018, this exemption is no longer applicable.
Mortgage Interest Deduction
Taxpayers can deduct interest on up to
Foreign Earned Income Exclusion
Allows taxpayers living and working outside the U.S. to exclude a certain amount of foreign earned income from U.S. tax (
Child Tax Credit
A credit worth up to
Education Credits
Includes the American Opportunity Tax Credit and the Lifetime Learning Credit, which help reduce education costs for qualifying expenses.
Capital Gains Exclusion on Home Sale
Exclusion of up to 500,000 for married couples filing jointly) of capital gains from the sale of a primary residence, if certain conditions are met.
Charitable Contributions
Deductible contributions to qualifying charitable organizations, limited to a percentage of the taxpayer's AGI.
State and Local Taxes (SALT)
Taxpayers can deduct state and local property, income, and sales taxes up to a combined limit of 5,000 if married filing separately).
Standard Deduction
A portion of income not subject to tax that can be used to reduce your tax bill, the amount varies based on filing status, age, and blindness.
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