MEDICAL EXPENSES
Don't spend a lot of time with this deduction if you do not have considerable expenses. Do this quick test:
- Add up the gross wages amounts on all your W-2's.
- Multiply that total by 10%.
- If you think the total of your medical expenses are anywhere near the 10% above, then proceed.
- If not, slip Itemized Deductions and go to Taxes.
Medical expenses include the following:
- Only expenses that were actually paid during the year. Having a bill that has not been paid does not count.
- Paying with a credit card counts as having been paid whether you paid the credit card bill or not.
- "Medical" includes "dental" and "prescription drugs," but not over-the-counter drugs.
- Medical insurance.
- Amounts paid to doctors, dentists, hospitals, medical labs, etc.
- Cost of travel and overnight accomodations to get medical expenses. [rare].
- Mileage to and from doctors' offices, hospitals, etc. [Usually minimal].
- Medical books and guides.
- Chiropractor.
If you or someone in your immediate family is handicapped, inquire further. There are other deductions for the refitting of vehicles and buildings for the handicapped. |
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TAXES
- Balance due paid on your last year's state income tax return.
- Withheld state income tax on your W-2's.
- Property tax paid during the calendar year.
- Sales tax is NOT deductible.
- If you bought a house during the year, give your tax return preparer a copy of the closing statement. You probably paid pro-rated property tax.
- Personal property tax on your car, appliances, and personal items. This is more common in New England states and very unusual in Southern states. The tax must be clearly identified as "personal property tax." Annual vehicle registration fees and inspection fees do not count as a deductible tax.
- Sales tax was once deductible. It no longer is.
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INTEREST
- Home mortgage interest reported on bank form 1098 is deductible.
- If you paid any late payment penalties, you may add that to the amount of interest.
- Interest on car loans, credit card balances, and charge accounts are not deductible.
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CHARITABLE CONTRIBUTIONS
- Money given to churches, synogogues, etc.
- Money given to United Way, Red Cross, etc.
- Old clothing, furniture, etc given to Goodwill or Salvation Army. The trouble with this deduction is that you have to declare the "garage sale" value, not the original cost. If the amount is more than $500, there is a form that the organization to whom you gave the contribution must fill out for you.
- Volunteer time is not deductible. Mileage and supplies you have to pay for are deductible.
- Blood given is not deductible.
- There is an internet rumor going about that says the IRS changed the rule about raffle tickets. The IRS has not done so. Raffle tickets sold by churches or other religious and charitable organizations are still not deductible.
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CASUALTY LOSS DEDUCTION
The question is:
Did you have any property that was stolen or damaged or destroyed by fire, storm, vandalism?
If so, was the amount of the loss greater than 10% of your total income?If the answer to both is "yes," then inquire further. You may have a deduction.EXAMPLE:
- Your total income is $40,000. You had fire damage of $6,000 that was not covered by insurance. You have a Casualty Loss Deduction.
- Your total income is $40,000. Thieves stole a boat and motor worth $2,000. You do not have a Dasualty Loss Deduction.
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