• Taxes are financial charges imposed by a governing body to service debt and carry out its programs and objectives. U.S. citizens are subject to a taxes such as those on goods and services, real estate, and income. Income earners are required to file returns to document taxes paid, pay taxes owed and receive tax refunds.
  
  

Mortgage Interest

• A tax deduction is an expense you incurred that the government allows you to deduct from your taxable income. The interest you have paid during the year on a home mortgage or a second home mortgage may be tax-deductible. Since home-loan payments are often a large expense, this deduction can amount to hundreds or thousands of dollars in savings. Only one second home or vacation home can qualify for a mortgage interest deduction. State property and real estate taxes are also deductible from your federal income tax.
  
  

Charitable Giving

• Contributions made to qualifying charities such as the Red Cross and religious institutions are tax-deductible. Noncash donations may also be tax-deductible up to the value of the items given. For instance, if you donate several hundred dollars' worth of clothing to a charity that gives it to the needy, you can deduct the value of the clothes from your taxes. Charitable giving should be documented.
  
  

Tax-Advantaged Retirement Accounts

• Another way to avoid paying taxes is to save using tax-advantaged retirement accounts, like 401(k) plans and individual retirement accounts (IRAs). With 401(k) plans, money can be contributed before paying taxes. Similarly, contributions made to traditional IRAs are often tax-deductible. A Roth IRA is a special type of IRA that allows after-tax income to be contributed and then grow tax-free. Contributing funds to these types of accounts can allow workers to avoid taxes and save more for retirement.
  
  

Employee Expenses

• If your job that requires you to spend money that is not reimbursed by your employer, some of your expenses may be tax-deductible. The IRS lists the following as potential tax deductions for employees: dues to professional societies, passport for a business trip, tools and supplies used in your work, union dues, job search expenses and work-related education.