Money Management Skills

60

Lecture 9: Essential Tax Principles

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includes things like interest earned on a savings account, rent from

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% The government has become far stricter about reporting small

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you have a hobby or online side business that produces income, you

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Deductions

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calculating the amount of income we use to estimate federal income

taxes and eligibility for other types of deductions—also known

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starting to phase out deductions and exemptions for high-income

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% The most common above-the-line deduction is the amount you save

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sheltered retirement account, you can reduce your income today by

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retirement savings as income when you pull it back out after you

retire, so the primary advantage of these accounts is the ability to

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% Other above-the-line deductions include interest on student loans,

moving expenses, alimony, health insurance, and self-employment