Itemized Deductions
Itemized deductins are captured on Schedule A as an alternative to taking the standard allowable deduction. To determine which is more favorable for your situation, it is often best to calculate your return both ways. Generally, if you own your own home you will itemize deductions. To hep you gather and retain the correct recores, a checklist is provided here for your use. While the list is not all inclusive, it should gice you a good starting point.
Medical & Dental Costs
Medical and Dental expenses are generally deductible to the extent the exceed 7.5% of your income. Some of the more common expenses:
Adoption
Doctor/Dentist Fees
Drug/Alcohol Treatment
Guide Dog Costs
Handicap Access Devices
Hospital Fees
Insurance Premiums
Prescriptions
Laser Eye Surgery
Lead Based Paint Removal Cost
Life-Care Fees for Medical Treatment
Meals/Lodging for Hospital Stays
Medical Devices
Operations
Organ Donation
Physician Diet/Health Programs
Psychiatric Care
School and/or Home for Disabled
Smoking Cessation Program Costs
Special Life Items*
Transportation (medical)
Weight Loss Programs
*Glasses, Dentures, Limbs, Wheelchairs, Hearing Aids, Contacts, etc.
Taxes
The following taxes are generally 100% deductible.
State/Local Taxes
Foreign Income Taxes
General State/Local Sales Tax**
Payments to Mandatory State Funds
Property Taxes
Real Estate Taxes
Value Based Auto License Fee
**You can deduct either general state/local sales tax OR state/local income tax.
Interest Expense
While most personal interest is no longer deductible (credit card, car loans, etc), there are still interest expense deductions available to you.
Home Mortgage Interest
2nd Home Mortgage Interest
Home Equity Loan Interest
Interest on Special Assessments
Business Interest
Investment Interest
"Points" Paid
Charitable Contributions (donating money or property)
Both cash and property are generally deductible if donated to qualified organizations. Qualified organizations include:
Churches
Boy & Girl Scouts
Non-Profit Hospitals
Non-Profit Schools
Public Parks
Goodwill
Red Cross
Salvation Army
United Way
War/Veterans Groups
YMCA/YWCA
Some Environmental/Conservation Groups
***Make sure you keep track of your mileage to and from the charity. It is also deductible.
Casualty & Theft Losses
Casualty and Theft losses are generally deductible to the extent they exceed 100% of your adjusted gross income, are not reimbursable via insurance and each event exceeds $100.00.
Car Accident
Fire
Theft
Natural Loss: Tornado, Hurrican, Flood
Other Accidents
Vandalism
Miscellaneous Deductions
Most miscellaneous deductions are only deductible to the extent they exceed 2% of your adjusted gross income. Items with an "*" are usually not subject to the income threshold.
Gambling Losses to Offset Gains*
Handicapped Job Related Expenses*
Work Uniforms
Un-Recovered Annuity Costs*
Job Hunting Expenses
Safe Deposit Box Cost
Tax Preparation Fees
Employee Business Expenses
Hobby Expenses to Offset Gains
Repayments of Income*
50% of Business Related Meals/Entertainment
Repayments of Social Security
Investment Related Expenses
Classroom Material Expenses for Teachers
In-Home Office
IRA/KEOGH Administration Fees
Business Use Depreciation
Certain Legal Fees
Trust Administration Fees
Job Required Medical Exam
Job Required Education Expenses