Below The Line Deductions – More Tax Breaks
Below The Line Deductions – Additional Deductions To Apply After Above The Line Deductions
There are many below the line deductions available to business and personal taxpayers. Before we cover below the line deductions and give you some examples, we need to make sure you understand what below the line means. We’ll do this be comparing it to above the line deductions. Above the line deductions are either itemized deductions or standard deductions subtracted from your total gross income. After subtracting your above the line deductions yous should arrive at your adjusted gross income, also referred to as your AGI. For those that are visual, we have included an equation for you to view.
Above The line deductions equation:
Gross Income – Above The Line Deductions = Adjusted gross income (AGI)
Now that you know how we use above the line deductions to arrive at your adjusted gross income we can move on. After you have applied all the above the line deductions that you qualify for we can work on the below the line deductions. Below the line deductions are deductions that are actually subtracted from you AGI. The sad thing is that not everyone will benefit from using below the line deductions. The reason for that is that the total dollar amount for your below the line deductions must exceed the standard deduction. Otherwise, it won’t help reduce your AGI and further.
We have listed some of them for your consideration. This is not meant to be an all inclusive list, nor complete up to date information. If there is a below the line deduction you think might benefit you, then please do further research. You may also want to contact our office to set up a consultation regarding below the line deductions, or any other tax or financial matters.
Some Simple Below The Line Deductions:
• Charitable Donations• Medical Expenses• Tax• Interest Expenses