The tax code in the United States requires citizens and residents to pay taxes based on the income they receive during the year. After summarizing all income sources, a series of qualified deductions are allowed which result in an adjusted gross income total, or AGI. Learning how to accurately file your taxes by minimizing your adjusted gross income can lower your income tax obligation.c 

Your adjusted gross income figure is one of the most important totals on your tax forms. The AGI is often used to determine your eligibility for free filing options and may be used as a starting point for your state income taxes. AGI adjustments are generally related to health, eduction, business expenses and self-employment costs.c 

Adjusted gross income is generally the second calcuation section completed on your yearly tax forms. After your gross income is summed in the first section, a variety of approved expenses are listed. The amount you can claim in adjustments is deducted directly from your gross income. Your tax rate and tax total is then calculated based on your adjusted income. So, the deductions you take directly impact the amount of taxes you pay.c  

Optimize your tax treatment by taking advantage of all deductions for which you qualify. Review each line item associated with adjusting your income to determine which ones apply to your financial situation. Specific deductions include educator expenses, some business expenses, health savings accounts, some qualified moving expenses, self-employed expenses, alimony, IRA payments, education expenses, and student loan interest.c 

Obtain documentation for every deduction you take to ensure accuracy. If you elect to take deductions for a health savings account, moving expenses, self-employment tax, tuition or fees, business expenses, or domestic production activities, you will need to complete additional forms to support your deduction total.c  File supporting documentation such as receipts, payment stubs or other payment documentation to use in the event the IRS requests additional support for your declared deductions.c