Types

Two types of common deductions are the standard tax deduction and the itemized deduction, according to MoneyZine.com. Usually, you must choose one or the other.

Standard Deduction

The exact amount of the standard deduction changes annually. As of 2009, the standard deduction stands at $5,700 for single filers, $11,400 for married couples and $8,350 for a head of household, according to Money-Zine. You may be able to itemize interest from student loans, IRA retirement account contributions and certain business expenses, reports Wells Fargo.

Itemized

Typical itemized deductions include taxes other than federal (such as state taxes), medical care, donations to a charity and certain crimes you are a victim of, such as a burglary, reports Wells Fargo (See References 2).

Benefits

The standard deduction makes filing a tax return much simpler than itemization---you simply subtract it from your taxable income. However, itemizing deductions can exceed the standard deduction and further reduce your taxable income, reports Money-Zine.

Considerations

People choosing to itemize deductions must follow rules and regulations set forth by the IRS, as exceptions exist for each itemized deduction.

Source:

Money-Zine.com: Tax Deductions

Wells Fargo: Common Deductions

Resource:

Internal Revenue Service Homepage