Tax deductions fall into two broad categories: the ones taken before calculating your adjusted gross income (AGI), and those taken after.

The second kind are called itemized deductions.

Itemized deductions include things like: money spent for supplies for work that weren't reimbursed (like teachers buying school supplies); medical expenses; state and local taxes paid; mortgage interest; gambling losses; donations.

"Taking a deduction" doesn't mean that the government gives you back the money you spent. (That would be a tax credit.) A deduction subtracts from your AGI, so, you pay less taxes.

The one problem with taking deductions is that many deductions are only for expenses greater than some percentage of your AGI. Usually, the threshold's something like 2%.

Suppose you had an AGI of $20,000. 2% of that it $400. To take a deduction for a category of expenses, you must spend more than $400 on that category of expenses. So, if you wanted to deduct your driving for work, it has to exceed $400 (or around 200 miles). The first $400 of that expense comes right out of your pocket! (Lesson: get reimbursed.)

Now, if your AGI is $40,000 (aka, a solidly middle class income), that AGI threshold is now $800.

Also, note that the threshold applies to an entire category of expenses, not all your expenses in total. So, you can spend $100 on driving, $200 on gambling, $1,000 in medical expenses, and have $500 in stolen property, and still not hit the lower threshold.

There are also upper limits to deductions... but generally, most people have problems even deducting things in the first place.

Generally, deductions have value to middle-income to high-income wage earners. If you're earning less than the median, you probably can't take many deductions, mainly because you're not going to be spending so much money on deductible expenses.

If you're seriously looking at taking deductions on education or medical expenses, consider getting tax exempt savings accounts.