Itemizing Your Deductions

Make sure you know which items you can deduct when you file your tax return

02/15/2018

Itemizing Deductions

Throughout the year, you may accumulate expenses that you can claim on your federal income taxes. This means that these items are eligible to be excluded from your taxable income. These exclusions are called itemized deductions. By deducting qualified items, you can save some money on your taxes when that time of year rolls around. Here are a few examples of expenses that qualify as itemized deductions once you’ve reached the standard deduction amount.
 

Charitable donations

According to the IRS, if you make donations to a charitable organization, your donation items are tax-deductible. If you take a large box of clothes, books or any other tangible items to a donation center, make sure you keep a list of the items you donated in as much detail as you can. You can itemize each of those items as deductions on your tax return and save money.
 

Medical and dental services

If you don’t have medical or dental insurance, or if you had to pay a significant amount of money out-of-pocket for those costs, your services may be tax-deductible. Kay Bell, a writer for Bankrate.com, reports that if you are under 65 years old and your medical and/or dental expenses for the year are more than 10 percent of your adjusted gross income (AGI), you can deduct those expenses on the year’s tax return.

If you are self-employed, you can deduct 100 percent of your premiums on your tax return. However, if you are under a spouse’s employer-paid medical plan, this deduction does not apply.
 

Business expenses

If you run a business out of your home, those business-related expenses are tax-deductible, according to Lisa Greene-Lewis, a contributor for U.S. News and World Report. This means that if you purchase any items exclusively for your business, like a new computer or office supplies, those qualify as deductions.
If you need to travel for your business, all of those expenses are tax-deductible as well. Keep track of your expenses during the trip, including mileage and any business-related admission costs you may acquire.
 

Stolen or destroyed items

You may also be eligible to itemize deductions if you experienced a loss of your items. If your home was broken into or your belongings were taken unlawfully, you can itemize those as a deduction on your tax return.

You can also itemize these deductions if your belongings were destroyed in a natural disaster, such as a hurricane or a flood. To qualify, your losses must exceed 10 percent of your income, according to Greene-Lewis. These loss deductions do not include items that were simply lost or broken during the year’s time.

Many people lose money every year because they’re unsure which of their expenses qualify for tax deductions. Be sure to keep track of your charitable donations, business expenses and lost or donated items. When tax season rolls around, you may be able to deduct those items on your tax return and save yourself some money.

Published by North Shore Bank. Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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