Standard vs. Itemized

• Deductions allow you to lower the amount of your taxable income for the year. When you get to the deduction portion of your tax return, you can choose between taking the standard deduction or itemizing your deductions. As of 2010, if you take the standard deduction as a married person filing jointly, you will get a standard deduction of $11,400. If you can itemize your deductions and get a bigger deduction than the standard amount, it makes sense to take this opportunity.
  
  

Interest Paid

• If you decide to itemize your tax deductions, one of the biggest areas for deductions in is interest you have paid. Perhaps the largest tax deduction will come from deducting the amount of mortgage interest you paid during the year. You can also deduct prepaid interest in the form of mortgage points. If you paid interest on student loans, you can also deduct this from your taxable income.
  
  

Donating

• Charitable contributions are another possible deduction. When you donate money to a charitable cause, you can usually deduct the amount of money that you gave from your income. You don't even have to give money; you can deduct the market value of any goods you gave to the charity. According to the IRS, you can write off up to 30 percent of your adjusted gross income in contributions to many organizations -- and in some cases, you can deduct up to 50 percent of your annual income.
  
  

Other Possible Deductions

• When filing taxes, you can deduct business expenses that you paid for. For instance, you could deduct the cost of supplies and equipment for your business. You could deduct mileage on your car for business purposes. You can also deduct any expenses that you pay for job hunting. If you are self-employed and you pay for your own health insurance, you can also deduct the amount of money that you pay for premiums for you and your family.