Explain "Other Deductions" as a Means of Reducing Tax Liability

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The Answer is The key deductions which fall into the category of other deductions are explained below:
1. Business Expenses
Miscellaneous itemized deductions are ordinarily deductible only to the extent that they exceed two percent of the taxpayer's adjusted gross income. However, if the taxpayer reports self-employment income on Schedule C, many of the same expenses, which are then treated as business expenses, become fully deductible. Examples of these expenses include accounting fees, interest expense, professional licenses, publications, auto expense, rent, cost of resale products, and salaries to employees.
2. Real Estate Losses
An individual may deduct up to $25,000 for losses on rental property as long as the adjusted gross income does not exceed $100,000; between $100,001 and $150,000 of adjusted gross income, the loss deduction is gradually phased out. Furthermore, most real estate taxes and mortgage payments are deductible on a second personal residence.
3. Rental Expense
The tax law on renting a vacation home states that if the home is used for less than 14 days per year for personal use or 10 percent of the number of days it is rented out and it is also rented at a fair rental price, then it can be designated as a business. In such a situation, the taxpayer will be entitled to deducting a number of business expenses associated with this home on a limited basis.

Explain "Other Deductions" as a Means of Reducing Tax Liability

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