What Expenses Can Be Claimed on a Tax Return?

what can be claimed as tax deductions

Many child-rearing expenses can be claimed on your tax return.

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The IRS doesn't tax you on your total income. Instead, provided you qualify, you may make certain deductions from your taxable income, which are based on expenses that you incur during the tax year. To qualify for many of these deductions, the IRS requires that you itemize your deductions.

Homeowner's Expenses

As of 2012, if your primary or secondary home is secured by a mortgage worth no more than $1,000,000 during the tax year, you may deduct mortgage interest that you pay each year. You may also deduct loan origination fees and mortgage insurance premiums. If you take out a construction loan to build a home, you may deduct loan interest for up to two years before you move in. Other types of expenses are deductible, such as casualty losses, theft losses and home office expenses.

Medical and Dental Expenses

You may deduct unreimbursed medical and dental expenses for yourself, your spouse and your dependents, to the extent that they exceed 7.5 percent of your adjusted gross income. This threshold increases to 10 percent starting in the 2013 tax year. Your expenses must be necessary rather than cosmetic -- you may be denied a deduction for breast augmentation surgery, for example. In some cases you are allowed to deduct premiums for long-term care insurance.

Charitable Contributions

You may deduct the value of any donations to a nonprofit organization qualified under Section 501(c)(3) of the Internal Revenue Code. You deduct cash donations at face value. You deduct donations of property at either fair market value, or in accordance with special valuation rules established for certain types of property, such as automobiles. Nonprofit hospitals, schools, churches, charities and scientific research organizations typically qualify under 501(c)(3).

State, Local and Foreign Taxes

Non-Itemized Deductions

Source: finance.zacks.com

Category: Taxes

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