J.K. Lasser's 1001 Deductions and Tax Breaks 2017

Introduction

Say the word “taxes” and most people groan. There are good reasons for this response: First of all, the cost of paying your taxes annually can be a financial burden. You may feel taken to the cleaners every time you view your paycheck after withholding for federal income taxes (not to mention state income taxes as well as Social Security and Medicare taxes). And taxes are time consuming—costing individuals 6 billion hours annually to file their returns.

Second, you may not even have to deal personally with taxes, other than paying them. The IRS says that about 60% of taxpayers use paid preparers for their returns.

Third, the tax law is very complicated and changing all the time. According to the Tax Foundation, the Internal Revenue Code (Tax Code) had 7.7 million words. There were only 11,400 words in the Tax Code in 1914, one year after the constitutional amendment authorizing the levy of an income tax. Between 2001 and 2012, there were 4,600 changes (which works out to more than one a day). Today the Tax Code is twice as long as it was in 1985. There have been major changes in the tax law nearly every year over the past 50 years—and this year is no exception! In addition, new court decisions and IRS rulings appear each day, providing guidance on how to interpret the law.

Fourth, you have to know what the tax rules are and can't claim ignorance to avoid taxes and penalties. Even if you use a tax professional or tax preparation software to prepare your return, ...