When filling out your annual income tax statements, you will want to figure out the expenses that you can include and itemize as tax deductions. Technically, there are many expenses that you can itemize and include depending on the category and purpose of the expense and your actual filing status. Your filing status will be based on your age and marital status primarily. There will be a standard deduction based on these factors. Your filing status can be altered if you have dependents as well. Assuming that you already know what your filing status is and the standard deductions you are entitled to, here are some of the categorical expenses that you can itemize and include.
- Medical related expenses. This is one categorical expense that is normally included and should be deducted provided that you used your own money to pay for it. Premiums for medical insurance are excluded. Basically, any expense you made that came from your own pocket relevant to medical bills can be itemized for as long as you have the official receipts to back them up. To calculate for the total deductions on this category, simply multiply .075 by your total income and deduct the result from the total expenses that are medical related.
- Travel and mileage. For as long as your travel expenses are business, charitable, or medical related, you can get deductions for these as well. What you will have to do here is to apply the rate for each mile. The rate will vary based on purpose. For instance, business miles can be rate about 50 cents per mile while medical and charitable miles at 20 and 15 cents respectively.
- Real estate. If you have paid real estate taxes, whether it is for your home or business property, you can have these deducted as well. Furthermore, if you are paying a mortgage for your home, the interest rate can be deducted as well. All you have to do is to add up all the interest payments or points that you paid for the year.
- Donations. Provided that your donations have gone to a legitimate non-profit organization such as churches, schools, hospitals, and humanitarian foundations, you can have these deducted as well. Of course, you will have to get receipts for these donations. Also, the minimum amount of each donation should be above $250. Now, if your donation was made in goods, you can still have the amount of the purchase of these goods deducted provided that you declare the appropriate market value of each item.
- Local taxes. All taxes paid to your city or state can be deducted as well. This includes vehicle registration, real estate taxes, local taxes for income, and business taxes. Add all these up and itemize them. Again, official receipts are required to back up these expenses.
- Employment-related expenses. Other expenses that can be considered employment related such as professional licenses, training, education, and wardrobe can be itemized as well. You will have to show proof that these expenses are required for your work or job in order for it to qualify as a deduction.
These are some of the common deductions you can include and itemize on your income tax statement. Make sure that you consult an accountant or tax attorney to make sure that what you itemize is in line with the conditions of the IRS as well as with your filing status.