Here's What You Need to Remember: Being your own boss has risks and it has rewards. Among the rewards is the fact that you can take various expenses, including health insurance, as an “above the line” deduction.

Few people actually like to pay taxes, and while the Internal Revenue Service is happy to take as much as you’ll send them, there are totally legal tax deductions that can lower what you owe and possibly even result in a larger refund.

It does take a little extra effort to get the tax credits, but it can be worth it. According to TurboTax there are more than $1 trillion in tax deductions, so if you’re not taking every deduction you’re entitled to you are just overpaying.

According to recent numbers, more than 45 million Americans itemized deductions on their 1040 returns and claimed some $1.2 trillion. By contrast those who claimed the standard deduction accounted for $747 billion, so those who took the “easy way out” may have shortchanged themselves.

Retirement Contributions

Saving for tomorrow could actually save you money today. H&R Block noted that contributions to a tax-advantaged traditional retirement account—including an IRA or 401(k)—can result in you owing less in taxes than if you didn’t contribute. The money comes out before the taxes do, which results in a lower taxable income. Salaried employees can have the contribution automatically taken from a paycheck, while you can also set up an IRA and contribute up to $7,000 per year as an “above the line” deduction, meaning you don’t even have to itemize in order to take advantage.

Charitable Donations

Give and you shall receive… a tax credit that is. You’ll need to itemize your deductions however, but many individuals find it worthwhile as you can deduct the current market value of goods donated to charity or the cash you give to your church. You can even deduct the mileage you travel in service of a charity.

According to the IRS, “In most cases, the amount of charitable cash contributions taxpayers can deduct on Schedule A as an itemized deduction is limited to a percentage (usually 60 percent) of the taxpayer’s adjusted gross income (AGI). Qualified contributions are not subject to this limitation. Individuals may deduct qualified contributions of up to 100 percent of their adjusted gross income. A corporation may deduct qualified contributions of up to 25 percent of its taxable income. Contributions that exceed that amount can carry over to the next tax year.”

Mortgage Interest

If you owe on your house, which many Americans do, you’re entitled to deduct the amount of the interest paid on the mortgage. Likewise, it is possible to deduct refinancing points and even other aspects of your ownership costs, such as property taxes.

Education Costs

Today going to school, especially for a college or other advanced degree, can add up fast. But consider it an investment in your future. In addition to possibly earning more money in a good career, it is possible to deduct your student loan interest but also to deduct the cost of tuition and fees in some cases. Education deductions are also “above the line,” so you don’t even have to itemize in order to take advantage.

Self-Employment Expenses

Being your own boss has risks and it has rewards. Among the rewards is the fact that you can take various expenses, including health insurance, as an “above the line” deduction. You can also deduct expenses related to your business, including Internet costs, office supplies and equipment, advertising/marketing and even travel. Of course, there is some extra work involved as you’ll need to itemize, but no one said being the boss is easy.

Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military small arms, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on Amazon.com. Editor’s note please always consult a tax professional and do not take this article for official legal or tax advice.

Image: Reuters.