Itemized Deductions

You may be able to itemize the following items:

Medical and Dental Expenses

• Prescription medicines and drugs not covered by insurance
• Doctor and dental bills not covered by insurance
• Hospital and nursing home expenses not covered by insurance
• Medical and dental insurance premiums not included in your self-employed health insurance deduction
• Lodging and transportation for medical care

These are only some of the basic qualifying medical deductions.  For more details, see your tax advisor.

Special Note: You may deduct only the portion of your medical and dental expenses exceeding 7.5% of your adjusted gross income.

Taxes You Paid

• State and local income taxes withheld (located on forms W-2, W-2g, 1099G, 1099R, 1099Misc)
• State and local income taxes paid in this tax year for a prior year, as well as any state and local estimate tax payments made during this year
• Taxes paid on real estate that you own and which is not used for business
• Personal property taxes you paid
• There may also be other taxes that your tax advisor can help you determine

Interest You Paid

• Interest on first and second mortgages, home equity loans, and refinanced mortgages secured by your main or secondary home
• Points and investment interest

Note:  Beginning in 2007, premiums paid for qualified mortgage indebtedness are treated as deductible mortgage interest. The deduction is phased out ratably by 10% for each $1,000 by which the taxpayer’s AGI exceeds $100,000 ($500 and $50,000 respectively for MFS). Thus the deduction is not allowed when AGI exceeds $110,000 ($55,000 for MFS).

Charitable Contributions

• Cash and checks charitable contributions (The entire amount of your cash contribution is deductible, providing you are not receiving anything in return)
• Food items donated to churches and pantries are fully deductible. If donating baked goods, the cost of the ingredients to make the baked items is deductible
• The fair market value of non-cash items, such as clothing and furniture, donated to facilities such as Goodwill and The Salvation Army.
• Out of pocket volunteer expenses and charitable miles (with certain restrictions).

Special Note: Keep good records such as cancelled checks or receipts from the organization showing the name of the organization, date, and amount donated. There are many items that are not deductible, and there may be limits on the amount you may deduct.

Casualty and Theft Losses

• Part or all of each loss caused by theft, vandalism, fire, storm or similar causes (Special rules apply to these deductions that your tax advisor can help you with)

Job Expenses and Most Other Miscellaneous Deductions

• Unreimbursed employee expenses such as job travel, union dues, and job education
• Tax preparation fees you paid
• Safe deposit box rental fees
• Other expenses may also be deducted in this section

Other Miscellaneous Deductions

• Gambling Losses (but only to the extent of reported gambling winnings)

Special Note: There are many other deductions and there are special rules that apply to all of the deductions. Please seek professional tax advice concerning these special rules and other deductions.

Don't Qualify to Itemize Deductions?

If your itemized deductions don't exceed your standard deduction, perhaps you can shift expenses so you can itemize every other year.