Tax Deductions

Our self-assessment income tax system places the burden for claiming deductions on the taxpayer. Don’t look for a letter from the IRS advising you that you failed to claim a deduction for real estate taxes on your form 1040, Schedule A.

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This tax preparation checklist for deductions is intended to assist you in meeting your responsibility to pay the least amount of income tax under the law.

1. Medical and Prescription Drug Expenses:
   
   Unreimbursed medical expenses, health and long term care insurance premiums and travel and lodging to receive medical treatments. Prescription drugs-most drugstores provide a computer printout of your prescription drugs. Don’t forget to log mileage driven to receive medical treatment.
2. Mortgage Interest:
   
   Principal and second residence (including boats, trailers and mobile homes). Home equity interest on loans up to $100,000 is deductible. You should receive a Form1098 for the interest you paid on your residence. Points or loan origination fees on a new house
3. 
   
   
   Investment interest on money borrowed to buy investment property:
   
   Student Loan Interest: Up to $2500. Phased out when your income is between $50,000 and $65,000 if single and $105,000 to $135,000 if married.
4. Taxes:
   
   State and City Income taxes, real estate taxes, ad valorem taxes paid on your personal automobile, trailer or boat, estimated state income taxes.
5. Contributions:
   
   Cash donations (those in excess of $250 need receipt from charitable organization), donations of clothing and household goods, out-of-pocket expenses for charitable work, miles driven for charitable work, include payroll deductions.
   
   Casualty losses (flood, fire, theft) that exceed 10% of adjusted gross income.
6. Moving Expenses:
   
   See IRS Form 3903. If your move was work related and your new job is more than 50 miles from your old home you are eligible to deduct your moving costs, travel expenses and certain storage expenses.
7. Clean Fuel Tax Deduction For Hybrid Vehicles
   
   To claim the deduction for the purchase of a clean-fuel vehicle, include the deduction in the total on line 35 of Form 1040. Also enter the amount of your deduction and "Clean Fuel" on the dotted line next to line 35.
8. 
   
   
   Miscellaneous Deductions:
   
   Unreimbursed employee business expenses, union dues, tools and supplies, uniforms, investment expenses, travel and entertainment, tax preparation fees, safe deposit box, gambling losses, job seeking expenses, legal fees for tax advice or estate planning in connection with a divorce are deductible.