Q:

What are some federal income tax deductions that can save a lot of money?

A:

Quick Answer

Some of the biggest federal income tax deductions include sales tax, health insurance premiums and charitable gifts, states TurboTax. Some other big federal income tax deductions are the use of a home office, Internet and phone services, and travel expenses, states Investopedia.

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Full Answer

Deducting sales tax from federal income taxes is beneficial if the person made a large purchase, such as buying a car or a computer, explains TurboTax. People can only deduct health insurance premiums if they are self employed or if the expenses are 7.5 percent of total income. When deducting expenses for home office use, taxpayers can deduct the business percentage of deductible mortgage interest, utilities, homeowners insurance, home depreciation and maintenance, notes Investopedia.

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