ITEMIZED DEDUCTIONS CHECKLIST
Generally speaking, the decision of whether to take the Standard
deduction or to itemize deductions on Schedule A, depends on whether a
home is owned. Usually, the payment of mortgage interest and property
taxes will make itemizing advantageous. The following list of items are
other points that will be included on Schedule A. Throughout the year,
keep these items in mind, save receipts and other documentation to
substantiate the deductions. Note that if your Adjusted Gross Income
(AGI) is over $166,800 (for 2009), then special rules apply.
NOTE: This checklist does not constitute legal or professional tax
advice. The sole intent of this checklist to provide taxpayers with general
ideas regarding items and categories of deductible expenses and losses
recorded on Schedule A of Form 1040, with regards to federal income
taxes. Complete information can be viewed on the Internal Revenue
Service web site: www.irs.gov
1) Medical and Dental Expenses. This does not include insurance
premium payments deducted from payroll as part of a Section 125
“Cafeteria” Plan. These deductions were taken as “pre-tax” payroll
deductions, so they cannot be deducted again here. What can be
included is out of pocket expenses for eye glasses, office visit co-
payments, prescription drug co-payments, etc. Note that a “floor” of 7.5%
of your AGI must be met before the deduction can be taken. For
example, if your AGI is $25,000, then you must have at least $1,875
($25,000 x 7.5%) of qualified expenses before a deduction can be taken
for these types of expenses.
2) Taxes Paid by You. This would include any state and local
income taxes, real estate taxes, personal property taxes, etc. Beginning
in 2004, the IRS is allowing a deduction for sales taxes paid (since Texas
does not have a state income tax.) This deduction is allowed for only
those taxpayers who itemize their deductions. A table provided by the
IRS gives the amounts to be included in the itemized deductions. In
addition to the amount on the table, additional deductions will be allowed
for sales tax paid on autos, leased vehicles, RV’s, trucks, etc.; homes
(prefab and manufactured) and home building supplies.
3) Interest Paid by You. This would include interest and points
reported on Form 1098 or investment interest. As the buyer, the interest
paid to the seller of a personal residence would also be deductible. This
does not include personal interest paid on credit cards, personal auto
loans, or other personal debt.
4) Gifts to Charity. For gifts by cash or check, a receipt should be
received and kept to substantiate the gift. If any gift is over $250, there
are special requirements to fulfill. For gifts that are non-cash in nature,
documentation must be kept showing the type of gift and value assigned.
For non-cash gifts over $250, there are special requirements to fulfill. If
the non-cash gifts are over $500, then special instructions apply. Note
that there are limitations to the amount allowed for deductions, any
excess of the limits may result in a carryover to the next year. Also, there
are special considerations for benefits received from a charitable gift.
5) Casualty and Theft Losses. This would include any substantiated
economic casualty or theft loss, such as the destruction of a home or loss
of a vehicle or other valuable asset. Generally, there is a “floor” of 10%
on the Adjusted Gross Income (AGI).
6) The following list of items are grouped and totaled together. They
must meet and exceed an AGI “floor” of 2%.
a. Valid but unreimbursed employee expenses such as job travel,
union dues, job education, professional dues, etc.
b. Tax preparation fees.
c. Other expenses that were paid to produce or collect taxable
income.
7) Other Miscellaneous Deductions. This category would include
gambling losses, but only to the extent of gambling winnings; federal
estate tax on income in respect to a decedent; certain unrecovered
investments in a pension, etc.
Generally speaking, the decision of whether to take the Standard
deduction or to itemize deductions on Schedule A, depends on whether a
home is owned. Usually, the payment of mortgage interest and property
taxes will make itemizing advantageous. The following list of items are
other points that will be included on Schedule A. Throughout the year,
keep these items in mind, save receipts and other documentation to
substantiate the deductions. Note that if your Adjusted Gross Income
(AGI) is over $166,800 (for 2009), then special rules apply.
NOTE: This checklist does not constitute legal or professional tax
advice. The sole intent of this checklist to provide taxpayers with general
ideas regarding items and categories of deductible expenses and losses
recorded on Schedule A of Form 1040, with regards to federal income
taxes. Complete information can be viewed on the Internal Revenue
Service web site: www.irs.gov
1) Medical and Dental Expenses. This does not include insurance
premium payments deducted from payroll as part of a Section 125
“Cafeteria” Plan. These deductions were taken as “pre-tax” payroll
deductions, so they cannot be deducted again here. What can be
included is out of pocket expenses for eye glasses, office visit co-
payments, prescription drug co-payments, etc. Note that a “floor” of 7.5%
of your AGI must be met before the deduction can be taken. For
example, if your AGI is $25,000, then you must have at least $1,875
($25,000 x 7.5%) of qualified expenses before a deduction can be taken
for these types of expenses.
2) Taxes Paid by You. This would include any state and local
income taxes, real estate taxes, personal property taxes, etc. Beginning
in 2004, the IRS is allowing a deduction for sales taxes paid (since Texas
does not have a state income tax.) This deduction is allowed for only
those taxpayers who itemize their deductions. A table provided by the
IRS gives the amounts to be included in the itemized deductions. In
addition to the amount on the table, additional deductions will be allowed
for sales tax paid on autos, leased vehicles, RV’s, trucks, etc.; homes
(prefab and manufactured) and home building supplies.
3) Interest Paid by You. This would include interest and points
reported on Form 1098 or investment interest. As the buyer, the interest
paid to the seller of a personal residence would also be deductible. This
does not include personal interest paid on credit cards, personal auto
loans, or other personal debt.
4) Gifts to Charity. For gifts by cash or check, a receipt should be
received and kept to substantiate the gift. If any gift is over $250, there
are special requirements to fulfill. For gifts that are non-cash in nature,
documentation must be kept showing the type of gift and value assigned.
For non-cash gifts over $250, there are special requirements to fulfill. If
the non-cash gifts are over $500, then special instructions apply. Note
that there are limitations to the amount allowed for deductions, any
excess of the limits may result in a carryover to the next year. Also, there
are special considerations for benefits received from a charitable gift.
5) Casualty and Theft Losses. This would include any substantiated
economic casualty or theft loss, such as the destruction of a home or loss
of a vehicle or other valuable asset. Generally, there is a “floor” of 10%
on the Adjusted Gross Income (AGI).
6) The following list of items are grouped and totaled together. They
must meet and exceed an AGI “floor” of 2%.
a. Valid but unreimbursed employee expenses such as job travel,
union dues, job education, professional dues, etc.
b. Tax preparation fees.
c. Other expenses that were paid to produce or collect taxable
income.
7) Other Miscellaneous Deductions. This category would include
gambling losses, but only to the extent of gambling winnings; federal
estate tax on income in respect to a decedent; certain unrecovered
investments in a pension, etc.
