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(1). US taxpayers are allowed following deductions from gross income
o A special deduction called personal exemption. This is allowed only to those taxpayers who have dependents. It is a fixed amount and an additional amount for each child or other dependents to which taxpayer supports.
o A flat amount as a standard deduction is allowed to US taxpayers.
o The amount of interest and property taxes paid on the principal and second homes is deductible.
o Local and state income taxes are deductible
o Donations and contributions to charitable organizations are deductible up to the limit of 50% of the gross income.
o Medical expenses in excess of 7.5% are deductible
o Other income producing expense in excess of 2% of gross income are deductible....
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