Things That are Tax Deductible
- If you own a home and are paying a mortgage, there are several deductions that you can make when you file your taxes. You can deduct all mortgage interest paid, as well as any points on a mortgage. If you purchased a home, you can deduct some closing costs, such as insurance premiums and appraisal and search fees. And if you had to move because of a job change, you may be able to deduct the moving expenses as well, though there are requirements in distance and time. You can also deduct your annual property taxes.
- Employment deductions include non-reimbursed expenses as well as local transportation (gasoline) and tools. You can deduct work clothes, even if they are not uniforms, as long as they quality as being necessary for the line of work you do. You can also deduct the cost of employment-related education that improves or maintains skills required in your present job or is required by your employer.
- Charitable deductions include monetary donations to a charity or religious organization, as well as clothes or furniture donated to organizations that quality. Car donations to such organizations as Purple Heart are deductible as well. Clothing donations up to $300 are acceptable without receipts, though it is best to always get a receipt for any charitable deductions.
- Aside from being a large expense for many families, college tuition can be tax deductible. You can deduct up to $4,000 in college tuition that you paid; however, you cannot deduct that if it was paid by a lender. Interest on student loans also is deductible. The student lender should mail you or notify you of the interest to include in your deductions.
- You can deduct medical expenses only if you are paying them, not if your health care or insurance provider pays for them. If you are paying for your medical expenses, you can deduct medical and dental care premiums, as well as transportation costs, although they must exceed 7.5 percent of your adjusted gross income.
- If it is necessary to place your child or children in day care because you are working, that is a deductible expense. In some cases, you can also deduct contributions to a tax-deferred individual retirement account, although the amount you can contribute or deduct may be limited if you are able to contribute to an employer-sponsored plan, such as a 401(k), at work.
