Itemized Deductions
MEDICAL AND DENTAL EXPENSES
Deductible expenses include:
- Prescription medicines and drugs (including insulin)
- Medical, dental, and nursing care, including amounts paid for unreimbersed qualified
long-term care services
- Medical and hospital insurance premiums, including amounts paid for eligible long-term
care (subject to certain limitations based on the insured person's age)
- Prescription eyeglasses, hearing aids, crutches, wheelchairs, and guide dogs
- Certain home improvements made for medical purposes or to make the home suitable
for a disabled person
Nondeductible expenses include:
- Life insurance policy premiums
- Nursing care for a healthy baby
- Nonprescription drugs of medicines
- Weight-loss programs (unless recommended by doctor)
- Funeral, burial, or cremation costs
- Unecessary cosmetic surgery (surgery that does not correct congenital abnormality
or an abnormality caused by injury or disease)
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TAXES
Deductible Taxes:
- State, Local and Foreign Income Taxes - hose taxes include tax withheld, estimated
payments and tax paid for an earlier year
- Real Estate Taxes - State, Local or Foreign taxes on real property, such as the
taxpayer's house or land, are deductible. Real estate taxes are deductible
when paid. If taxes are paid with a mortgage payment and held in escrow, do
not deduct the taxes until they are paid back by the bank or the mortgage lender.
- Personal Property - Tax-Taxes that state and local governments charge on the value
of personal property is deductible. A portion of the cost of perosnal vehicle
registration may fall in this category
Nondeductible Taxes:
- Federal taxes - income tax, social security (FICA), Medicare, railroad retirement
tax, and excise taxes or customs duties
- Water and sewr taxes
- State, local and federal taxes on gasoline, diesel, and other motor fuels used in
a non-business vehicle.
- Utility taxes - gas, electricity, etc.
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INTREST
Home Mortgage Interest
A taxpayer can fully deduct points in the year he or she pays them only if all of
the following conditions apply:
- The taxpayer itemizes deductions
- The loan is used to buy or improve a main home (a main home is the one the taxpayer
lives in most of the time)
- The loan is secured by that main home
- The loan meets the requirements for deductible mortgage interest, discussed earlier
under Home Mortgage Interest
- Paying points is an established business practice in the area where the loan was
made
Non-deductible Interest:
- Loan fees; aid for services necessary to get a loan (closing cost, down paayment)
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CONTRIBUTIONS
Qualifying Organizations:
- Churches, synagogues, temples, mosques, Salvation Army, Red Cross, CARE, United
Way, Boy & Girl Scouts, World Wildlife Fund, etc.
- Nonprofit schools and hospitals
Nonqualifying Organizations:
- Business organizations, such as the Chamber of Commerce
- Politcal organizations and candidates
- Homeowner's associations
Deductible Items:
- Money gifts
- Dues, fees, and assessments paid to qualified organizations above the value of the
benefits received (not country clubs or other social organizations)
- Fair market value of used clothing, furniture, etc.
Nondeductible Items:
- Cost of raffle, bingo, or lottery tickets
- Blood donated to a blood bank or the Red Cross
- Direct contributions to an individual
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MISCELLANEOUS ITEMIZED DEDUCTIONS
Deductible Items:
- Union dues and fees
- Uniforms not adaptable to general use
- Professional books, magazines, journals, etc.
- Employment-related educational expenses
- Expenses of looking for a new job
- Investments counsel fees
- Tax counsel and assistance
- Safe deposit box rental for investment documents
- Acupuncture
- Insulin
- Air conditioner for allergies
- Nursing fees
- Contacts, including supplies
- Chiropractic services
- Cosmsetic surgery for deformity relating to a congenital abnormality, accident,
or disease
- Birth control prescribed by a doctor
- Investment interest
- Casualty losses
- Theft losses
- Work clothes not suitable for normal wear
- Occupational licensing fees
- Travel expenses relating to managing investments
- IRA administration fees
- Fees to collect interest or dividends
- Trust administration fees
- Impairment related work expenses
Nondeductible Items:
- Burial or funeral expenses
- Wedding expenses
- Home repairs, insurance and rent
- Insurance premiums (except medical insurance premiums)
- Losses from the sale of a taxpayer's home, furniture, personal care, etc.
- Personal legal expenses
- Commuting expenses to and from work
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