Understanding Deduction Categories
Learn about the six deduction categories Find Your Deductions uses to organize your potential tax savings.
Overview
Find Your Deductions automatically categorizes identified deductions into six IRS-recognized categories. Understanding these categories helps you review deductions and communicate with your tax preparer.
The Six Categories
Charitable Donations
Contributions to qualified charitable organizations, including:
- Donations to 501(c)(3) nonprofits
- Church and religious organization contributions
- Donations to educational institutions
- Contributions to disaster relief organizations
IRS Requirement: Donations over $250 require written acknowledgment from the charity.
Business Expenses
Deductible expenses for self-employed individuals and business owners:
- Office supplies and equipment
- Professional services (accounting, legal)
- Business travel and meals
- Software subscriptions
- Marketing and advertising
Note: These typically appear on Schedule C for self-employed filers.
Health & Medical
Qualified medical expenses that exceed 7.5% of your adjusted gross income:
- Doctor and specialist visits
- Prescription medications
- Health insurance premiums (if self-employed)
- Medical equipment
- Mental health services
Education
Deductible education expenses including:
- Tuition and fees (for qualifying programs)
- Required textbooks and supplies
- Student loan interest payments
- Professional development courses
- Work-related education
Home
Home-related deductions for homeowners and renters with home offices:
- Mortgage interest
- Property taxes
- Home office expenses (for qualifying home offices)
- Home improvements for medical purposes
Other
Miscellaneous deductible expenses:
- State and local taxes (SALT)
- Investment-related expenses
- Union dues
- Unreimbursed employee expenses (where applicable)
Confidence Scores
Each identified deduction includes a confidence score from 0-100%:
- High (80-100%) – Strong match to deduction criteria
- Medium (50-79%) – Likely deductible, review recommended
- Low (0-49%) – Possible deduction, manual verification needed
Reviewing Your Deductions
- Navigate to Deductions in your dashboard
- Filter by category to focus on specific types
- Review each item and its confidence score
- Confirm, edit, or dismiss deductions as needed
Important Disclaimer
Find Your Deductions helps identify potential deductions, but we are not tax professionals. Always consult a qualified CPA or tax advisor to confirm deductions are appropriate for your situation.