Examples of Tax Deductions
On January 25, 1995, President Bill Clinton spoke at Kutztown University in Pennsylvania about education and training tax deductions
TIMOTHY CLARY/AFP/Getty Images
Unfortunately, you can't just deduct whatever you want at any value. All deductions have restrictions. Here are some examples:
Health care expenses: Your out-of-pocket expenses must exceed 7.5 percent of your AGI before you can start writing them off.
Charity: You can deduct 50 percent or less of your charitable donations to public organizations, such as the American Heart Association, and 30 percent of your donations to private foundations. such as the Bill & Melinda Gates Foundation. If, however, you make contributions that can show capital gain. such as shares of stock, you
are limited to 30 percent for public organizations and 20 percent for private organizations.
Earned Income Credit: This credit is limited by income level. If you're married, filing jointly and have two or more dependent children, you can claim this credit only if your income is $38,348 or less.
And some deductions don't require you to itemize them to claim the deduction or credit. These include:
- Moving expenses, if you're moving more than 50 miles to be closer to your job
- Education: In addition to $2,500 of student loan interest, you can write off $4,000 in higher education expenses (tuition and fees). You may also be able to claim the Hope Credit and Lifetime Learning Credit.