Tax deductions come in many shapes and forms, both for personal and business purposes.
As a rule, you are entitled to take deductions only where specifically authorized by the Internal Revenue Code. Each taxpayer bears the burden of proving his or her entitlement to a deduction, and ambiguities are often resolved in favor of the government. Virtually anything you can use to reduce your taxable income can be considered some form of a deduction. Thinking about how your individual income tax return is computed is the best way to understand this concept. Expenses reported on Schedule E relating to property that produces income, such as expenses incurred for a rental property.