Tax time nears, and you wonder what can you deduct of all the various expenses you've paid throughout the year. You might be able to deduct some things you're not aware of, and others you think should be deductible, aren't. Let's discuss some of the most basic tax deductible items.

First of all, in tax law, there are such things as 'above-the-line' exclusions to income, tax deductible items, and tax credits. Although they all give you benefit on your taxes, they are all different pieces of the tax puzzle.

'Above-the-line' deductions, such as IRA contributions, self-employed health insurance deductions, alimony paid, and student loan interest, are all exclusions from your income and are reported on the front of the Form 1040. Some of these have limitations or other qualifying aspects, so it is important to check tax law or consult your tax professional about these.

Tax deductions also reduce your taxable income, as do personal exemptions you may claim. Tax deductions refer to one of two choices each taxpayer makes on his return. You may choose to take the standard deduction, which for 2006 was $5150 for singles or married filing separately, $10300 for married filing jointly or qualifying widow, and $7550 for head of household filing statuses.

The other option, which many taxpayers choose, is called 'Itemized Deductions'. These require a Schedule A, and posssibly additional forms, in order to claim them, and they apply to a Form 1040, or as it is called 'long form.' Itemized deductions can be many times much more profitable for the taxpayer than the standard deduction.

Itemized deductions include such broad categories as charitable contributions, taxes paid, mortgage interest deduction, and other miscellaneous deductions. Let's explore these by general sections of the Schedule A to understand a little more.

First of all, there are the health and medical expenses that may be deductible for you. You can deduct such health care costs as after-tax health and dental insurance premiums, some long-term care premiums, prescription drug costs, doctors' charges, hospital and medical lab fees, as well as certain qualifying weight-reduction program costs. You may also calculate and deduct medical mileage to and from the doctors, pharmacies, hospitals, etc.

Medical costs have specific regulations as to exactly what types and amounts are deductible in the various categories of health care. They also have a 7.5% limitation of AGI (Adjusted Gross Income), which limits the actual deductible costs even further. However, if you have paid a considerable amount of out-of-pocket health care costs in these categories, you may have enough to itemize them and get the tax benefit for a certain portion of them. It is wise and advisable to check this out.

Secondly, the category for taxes paid includes such taxes as real estate property taxes, state income taxes paid, other personal property taxes, and ad valorem taxes. More thorough explanations and specifics as to the deductibility of each type of tax is explained in the instructions to Schedule A, which is available on the IRS Web site, www.irs.gov. If you have state taxes withheld, or pay considerable real estate and property taxes, don't overlook this category of deductible items.

Thirdly, you may be able to deduct your mortgage interest for your principal residence and a second home. Mortgage interest used exclusively to buy or build your primary home is generally fully deductible. Refinancing or home-equity loans may be deductible in all or in part. Points to buy a main home are generally deductible in the year of the purchase. Points to refinance are generally amortizable. Consult the IRS Web site or your tax professional for more specific details on these items.

Fourthly, charitable contributions are generally deductible to all 501(c)(3) organizations and churches. Bear in mind that you need to have a written statement from the organization attesting your deductible amount of contributions. As a matter of fact, the laws have now changed and are more stringent about such statements for verification purposes. Make sure that you can substantiate your deductions to all charities. There are income limitations that may apply in certain situations, so consult your tax professional for advice on these.

Lastly, there are several other categories of miscellaneous itemized deductions that you may be able to claim. These include, but are not limited to, moving expenses that are job-related, unreimbursed employee business expenses, tax preparation fees, job-hunting expenses, and gambling losses (up to the amount of gambling wins). Some of these have income limitations involved in their deductibility calculations, so please consult the instructions for Schedule A, available on the IRS Web site, or a qualified tax professional for advice.

Tax credits are the final way to minimize your taxes. There are quite a few varying and distinct credits available for taxpayers. These include, but are not limited to, such things as child care credit, child tax credit, earned income tax credit, tuition tax credit, and retirement savers credit. These all have different rules and limitations, so consulting the IRS Web site or a tax professional is well-advised in these matters.

Remember, the tax system does provide ways for taxpayers to save money on their taxes. Check out and utilize all legitimate means of reducing your tax burden. Some of the ways to do this are through tax deductions, be they exclusions, standard deductions, or itemized deductions. Also, remember to check out tax credit options that may benefit you as well. We all must pay our share, but we can use all available legal options to reduce our tax burden and put more of our money in our pockets where it belongs.