Tax deductions are the way the Internal Revenue Service provides tax breaks. Itemizing deductions allows you to reduce the amount of income for which you're taxed. Claims of tax fraud might occur if you claim a deduction for which you aren't qualified. Learn which deductions are available, then decide which ones to claim. Use Form 1040 Schedule A to list deductions unless otherwise noted.
Work-Related Educational Expenses
Educational expenses are deductible provided the expenses are related to your job. The IRS states that educational activities that make you a better worker or that are required to maintain your position are a deductible expense. On the other hand, educational activities that prepare you for a new career are not a deductible expense. List your educational expenses on Form 1040 Schedule A under miscellaneous deductions. If you are self-employed, list your educational expenses on Form 1040, Schedule F, Form 1040, Schedule C-EZ or Form 1040, Schedule C.
Self-employed individuals and sole proprietors may deduct various business expenses. Business.gov states that a home office is deductible if it's your main place of business or is used for meetings with clients, customers or patients. You also may claim a deduction if you use a separate structure that's not attached to your home. You cannot claim a deduction if your work area is also used for personal reasons. For example, you cannot claim a room as your home office if your family uses it to watch TV on weekends. An exception is when your business is a home daycare or is used for storage purposes. Other deductible business expenses include office supplies, business trips and wages paid to employees.
Dental and Medical Costs
Bankrate reports that it's possible to deduct dental and medical costs that exceed 7.5 percent of your adjusted gross income. In addition to your own expenses, you may deduct expenses for dependents. Deductible costs include fees paid to surgeons, dentists and doctors. Fees for Christian Science practitioners, psychiatrists, psychologists and chiropractors also are allowed. Other allowable deductions include, but aren't limited to, hospital services, nursing services, long-term medical care and laboratory fees. If you have expenses that aren't covered by insurance, such as eye glasses or dentures, you may deduct those as well.
Contributions to Charity
Donating to a charitable causes helps you as well as the charity. Any money or merchandise you donate to a legitimate charity is tax deductible if you itemize deductions. You must obtain a bank record and a letter from the charity stating the date and amount of the contribution. Refer to IRS publication 561 for instructions on how to deduct a nonmonetary donation.
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