How to Federal Income Tax Deductions

We all hate federal income taxes, but if you take the time to learn about a few tax credits, exemptions, and deductions you can keep a lot more of your hard earned money in your pockets.

Instructions

1. Your employer can reimburse up to $100 to you monthly if you use public transportation costs or up to $180 a month in parking fees. Both are tax-free for you and a deduction for your employer on his federal income tax.

2. Students that drive to school can claim their gas as a deduction on their taxes as long as the get a receipts for the gas by itself on the receipts.
   You can claim more deductions for your fuel and mileage expenses if you drive another student to school.

3. Students can also claim the cost of their books and tuition every semester as long as they keep the receipts for them.

4. If your saving for college, place your money in a SEP, Simple, or Keogh savings accounts allows you to save more tax-free money then a standard retirement account.

5. If you get a raise or promotion that pushes you over into a higher tax bracket, ask your employer to use the money to get improved health care coverage and/or life insurance. You can receive the benefits without having to pay taxes on your raise. Your employer pays the premiums with your raise, and the employer can write off the premium cost on his/her taxes. So this is a win/win for everyone.

6. Earned interest on some state and local bonds can be a deductible on your taxes, as well as been free so all taxes meaning local, state, and federal taxes.

7. If you were to create a fee based car pool to transport people back and forth to work any income you earn can not taxed. You can claim deductions for your fuel and mileage expenses.