For example, if your AGI is ,000, your job expenses deduction threshold is 0. These figures are likely to change in subsequent tax years.
Itemized Deductions
If you determine that making itemized deductions will put you in a better financial position, these will need to be listed on Form 1040 Schedule A.
Here are some of the deductions that you may choose to itemize on your tax return.
Healthcare Deductions
This type of tax deduction includes the cost of medical care, prescriptions, dental treatments and health care that doesn’t fall into any of those categories. Healthcare costs are only tax deductible if they exceed 7.5% of your Adjusted Gross Income (AGI). Ask it now at Moolanomy Answers!
Copyright © 2007 - 2009 Pinyo B. For job expenses of 0, you can deduct 0 (your job expenses minus your job expenses deduction threshold).
Student Loan Interest
If you are still paying back student loans and are earning less than ,000 (or 5,000 for a married couple who file joint tax returns), you can deduct up to ,500 to cover interest charges on your student loan repayments. If your healthcare expenses come in at ,500, this leaves you with a total of ,000 that can be deducted (your healthcare expenses minus your healthcare deduction threshold).
Job Expenses
Job expenses are tax deductible if they exceed 2% of your AGI. As of 2009, a single individual can claim a standard deduction of ,700, while the head of the household can claim ,350.
Understanding the many tax deductions can be nothing short of a minefield, and many taxpayers are unaware of the many deductions that can be used to legally reduce your tax bill. This article highlights just a few of the tax deductions that you can claim if your circumstances lend themselves.
Standard Deductions
A standard deduction varies depending on your filing status, age and whether or not you are registered blind. You can then deduct up to ,500 of this interest as an itemized deduction.
Self employment Taxes
If you’re self employed, you can deduct 50% of your self employment taxes. This feed is provided for the convenience of Moolanomy’s subscribers. This can include bank statements or credit card statements (which detail the name of the charity, the date of the transaction and the amount paid) and written confirmation of your donation from the charity itself. For married couples who file joint tax returns, this rises to ,400. You are not allowed to reproduce the content within this feed in any manner.
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Keep meticulous written records of all cash donations to charity as the IRS can demand proof of any deductions that you are looking to claim. Your lender should send you a Form 1098-E, which detail in box 1 how much interest you have been paying on your student loan repayments. Other deductions not already mentioned above include:
home mortgage points
some taxes, e.g., property taxes
some interest expenses, e.g., home mortgage interest
401k, Traditional IRA, and other tax-deferred contributions
casualty and theft losses
business use of home and car
business travel and entertainment expenses
educational expenses
casualty, disaster, and theft losses
other miscellaneous expenses
Due to the overall complexity and variability, it’s a good idea to try both types of deduction before filing tax returns to see which option is more beneficial.
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This post was written by Sally Acquire
Do you have a financial question? This should be reported on line 27 of Form 1040.
Charity Deductions
Donating money to non-profit organizations is tax deductible if the deductions are itemized and the charity has a tax-exempt status. If you claim a standard deduction, you cannot claim this type of tax deduction. This is mandatory for cash donations of 0 or more.
Tax Preparation Deductions
If you use a tax professional to help you complete your tax return, you can deduct the fee for this.
Other Deductions
These are not all the deductions available to you. For donations to churches and other religious organizations, the latter requirement is not necessary. For example, an AGI of ,000 means that your healthcare deduction threshold is 00 (7.5% of ,000). For married couples who file their tax returns separately, the standard deduction is the same as for a single individual (,700).
Married couples who file separately must both claim either a standard deduction or an itemized deduction, meaning that there is no option for one spouse to claim a standard deduction while the other claims an itemized deduction.
In 2009, property owners are able to claim an extra 0-00 (with married couples who file joint tax returns qualifying for the higher end of the scale) beyond the basic standard deduction as long as they pay real estate taxes but don’t itemize deductions.
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This post was written by admin on November 15, 2009
