15th of April is the due date for filing income tax returns in the US. 'Tax Deduction' is a word you will be hearing often in the days to come. Let us explore what a 'Tax Deduction' is and how to go about filing your tax deductions.

A Tax Deduction is an expense incurred by a taxpayer that is subtracted from his overall income which is subject to taxation. There are many types of deductions in the US. A tax payer can either choose a standard deduction or an itemized deduction.

The standard tax deduction is a standard dollar amount that is subtracted from your taxable income. The basic standard deduction is based on your tax return filing status. For example, if you are filing as single, then your standard tax reduction is $5,150. If you are married and filing a joint tax return, your deduction would be $10,300 and $5,150 if married and filing a separate tax return. For those filing as head of household, the standard deduction is $7,550. For people over 65 or blind, there are additional tax deductions of $1000 - $1250 based on their filing status. There are further tax deductions for dependant children which should not exceed $5,150 unless the dependant is blind (in which case you add an extra $1,250).

In the case of making itemized deductions, you must fill a form 1040, Schedule A where you list all the tax deductible items you have paid for during the tax year. Mortgage interests, equity loans, donations to recognized charitable organizations, business mileage, medical and dental expenses etc. are considered as itemized deductions.

You are also entitled to file casualty or theft losses which are also considered as itemized deductions. However, you can only file one unexpected, sudden loss in the tax year that it occurred. In the case of unusual medical deductions on your tax return, it is advisable to get a note from your doctor stating it was necessary. In the case of non-cash donations to charity, you need a written appraisal of the fair market value and the appraiser must sign Form 8283 that you attach to your Form 1040.

Once you have completed filling in your form 1040, Schedule A, and totaled up the itemized deductions, compare this against the standard deduction according to your filing status. The larger of the tax deduction is the one you should opt for on your tax return. This will either reduce the income tax you owe or increase your tax refund. Either way, you benefit.