The most common type of tax benefit comes in the form of a tax deduction. When you claim a tax deduction, it reduces the amount of your income that is subject to tax. The amount of the deduction you are eligible to claim is precisely the amount of the reduction to your taxable income. Frequently claimed deductions cover the cost of tuition and fees, medical expenses, charitable contributions and state income taxes. Another benefit to a deduction is that it reduces income subject to the highest tax brackets first.