Which of these is an example of a tax deduction?

Paying home mortgage interest is an example of a tax deduction because the Internal Revenue Service (IRS) allows homeowners to deduct the interest paid on their mortgage from their taxable income. This deduction can significantly reduce the amount of income that is subject to taxation, thereby lowering the overall tax obligation for the taxpayer. Home mortgage interest is often one of the largest expenses for homeowners, making this deduction particularly valuable.

In contrast, receiving interest from a savings account is considered taxable income, meaning it is not a deduction but rather income that must be reported on your tax return. Gifts given to family members do not qualify as deductions either, since they fall under gift tax rules, and while gifts may be tax-exempt up to a certain limit, they do not reduce taxable income. Unpaid utility expenses are also not deductible since the IRS does not allow deductions for expenses that are unpaid; only actual expenses incurred can affect taxable income.