5. ItemizeIt’s easier to take the standard deduction, but you may save a bundle if you itemize, especially if you are self-employed, own a home or live in a high-tax area. It’s worth the bother when your qualified expenses add up to more than the 2012 standard deduction of $5,950 for singles and $11,900 for married couples filing jointly. Many deductions are well known, such as those for mortgage interest and charitable donations. However, taxpayers sometimes overlook miscellaneous expenses, which are deductible if the combined amount adds up to more than two percent of your adjusted gross income.
These deductions include tax-preparation fees, job-hunting expenses, business car expenses and professional dues.
You can also deduct the portion of medical expenses that exceed 7.5 percent of your adjusted gross income.