In this part, you will learn how you may be able to reduce your tax liability by claiming deductions directly from gross income, and whether or not you have such deductions, by either the standard deduction or itemized deductions. Your tax liability may be lowered by—

• So-called “above-the-line “ deductions that you may claim directly from gross income in arriving at adjusted gross income. These are allowed even if you claim the standard deduction. See Chapter 12.
• The standard deduction or itemized deductions. Although the standard deduction (Chapter 13) may provide an automatic tax reduction, it may be more advantageous for you to itemize deductions on Schedule A of Form 1040. Read the chapters on itemized deductions (Chapters 14-20) to see that you have not overlooked itemized deductions for charitable donations, interest expenses, state and local taxes, medical expenses, casualty and theft losses, miscellaneous expenses for job costs, and investment expenses. Each itemized deduction is subject to specific restrictions and limitations, and in addition, there is an income-based limitation to overall itemized deductions (13.7).
• Personal exemptions. Each personal exemption claimed on your 2017 return—for yourself, your spouse, your children, and other dependents—is the equivalent of a $4,050 deduction. However, the deduction for personal exemptions is subject to a phaseout if your adjusted gross income exceeds the threshold for your filing status. See Chapter 21 for the rules on personal exemptions.
• Other deductions are discussed in the following chapters:

  Chapter 40      Business expenses

  Chapter 9      Rental expenses

  Chapter 43      Automobile expenses