Under the term of taxable income is understood the total amount of individual’s income after all the adjustments and tax deductions. There are also various exemptions from gross income and they are different with regards to federal and state levels.
In Texas the number of deductions a person can be eligible for is broad. There are common and generally-known federal deductions such as student loan interest and charitable donations; however, there is also a number of state deductions and credits that are not so well known. This is frequently the reason why many taxpayers pay more than they could.
Sales and use tax can be deducted from federal income tax for those filers who choose to itemize their deductions; however, this practice has been in the effect until this year and there is a possibility that 2013 tax year will appear much harder for Texans due to the possible removal of this deduction. It will definitely affect other 6 states: Alaska, Florida, Nevada, South Dakota, Washington and Wyoming – as all of them appear to pay more in sales taxes and had an option to use the deduction as a fair compensation.
Other deductions may depend on a person’s age and status as well as employment and etc. Tax credits are also numerous and they can be of help with regards to a taxpayers eligibility and general situation.