Word of the Week:
Tax Deductions

Definition: Tax deductions, such as for donations to charity or interest on student loans, are amounts that you subtract from your income when calculating how much you owe in taxes. Claiming tax deductions helps you pay less tax. Example: If you earned $50,000 for the year but took $10,000 in deductions, the amount of tax you pay would be based on $40,000 of income.

Key Takeaway: Tax deductions reduce what you pay in taxes by lowering the amount of income your taxes are calculated on.

Fun Fact:  You may be able to deduct the cost of a swimming pool or home renovations if you need the pool or the renovations for medical reasons.