Above-the-Line Deductions

• When you file an income tax return, you must decide whether to use a standard deduction or your itemized tax deductions. According to TurboTax, the standard deduction is $5,700 for single filers for 2010 tax returns and $11,400 for joint filers. If the total of your itemized deductions is less than your standard deduction, you will not save money by claiming your itemized tax deductions. Above-the-line deductions, however, are special deductions that apply whether or not you decide to use your itemized deductions. Above-the-line tax deductions include contributions made to individual retirement accounts (IRAs) and health savings accounts (HSAs), interest paid toward student loans, moving expenses related to taking a new job and alimony payments.
  
  

Home Ownership Deductions

• Homeowners are often eligible for large deductions that make it worthwhile to choose to use itemized deductions rather than the standard deduction. The cost of real estate taxes paid on properties you own, such as your home, second home and vacation home, are tax deductible. In addition, mortgage interest paid on your first home and up to one additional property, like a second home, is tax deductible.
  
  

Deductible Taxes

• Several state and local taxes qualify as itemized tax deductions. According to the IRS, state and local sales taxes; state, local and foreign income taxes and personal property taxes qualify as tax deductions. You cannot deduct both your state and local income taxes and sales taxes -- you must choose to deduct one or the other. The sales tax deduction is most likely to benefit you if you live in a state without state income tax.
  
  

Other Deductions

• There are many other itemized deductions that could potentially save you money on taxes. The cost of running a home office and using your car for business purposes is tax deductible. Money you spend to travel for business, such as airfare to an office in a different city, is tax deductible. Money and property you give to charity also qualify as itemized tax deductions.