Federal tax exceptions are in simple terms a tax break. They can reduce the taxes that you pay to the federal government. They are figured by many different percentages; as well as whether you are filing as married, married but filing as single, single, or head of household. There are so many variables when talking about taxes in general. Everything is based on how much income is coming into the household, as well as how many people are living in the house.
If you are single and have no children, your tax deductions will be far different than a head of household filing with 5 dependents.
The government tries to take into consideration that families pay more to live than a single person does. They try to compensate this with federal tax exceptions. Come tax season, a head of household claiming 5 dependents will usually get a much larger tax return than that of a single person with no dependents.
It also varies greatly on how much money that you make. If you make over a certain amount, you will pay more. It is all in the percentages. They determine everything.
You can also file for itemized federal tax deductions. For instance, you can claim that you did updates to your home and therefore spent more money than would usually be spent. The government has just recently added double paned windows to the exception list. If you install double paned windows within a certain time, you can claim that as an exception. There is a list a mile long of the itemized deductions that one can claim. Another exception is the interest that you pay on your home each year.
Federal tax exceptions can be very confusing if you are attempting to do it yourself. If you have done enough research, you will be fine; but most people need a little help. That is why there are numerous tax specialists that know all about every exception that you can claim, saving you money and increasing that tax return we all count on. For usually a small fee, they will go through everything in detail and find as many deductions as they can for you.
The best idea is to let a professional do the hard work for you. They are trained each year, to learn about any new or outdated deductions. This can help you out drastically, as you want to save as much money as possible. Some places offers include that they will save you a certain amount of money, or they charge no fee.
Do some research of your own, and conclude which avenue will be best for you.