What Can I Deduct & What Receipts Should I Keep for My Taxes?

what can i deduct for my taxes

Accurate receipts will make filing your taxes easier.

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Itemizing your deductions can help you reduce your annual tax bill. Careful recordkeeping not only enables you to track your deductions and insure you take advantage of every one to which you’re entitled, but having all your receipts justifies these deductions should you ever face an IRS audit. Keep your receipts in one place to make compiling your tax return easier. After you file your return, store them with your completed return for seven years in case you’re audited.

Real Estate Deductions

Home mortgage interest is one of the largest deductions for many people. You

can deduct the interest you pay on the mortgage for a first and second home, real estate taxes and property insurance. Banks and other commercial mortgage lenders will provide you with a 1099 at the end of the year, showing the total interest you paid on your mortgage. If you have an owner-financed mortgage, you’ll need to track interest payments yourself. Obtain an amortization statement showing how much of each mortgage payment goes toward interest and how much pays down the principal of the mortgage. The amortization statement, together with your cancelled checks, provides sufficient proof of your payments. Also keep copies of insurance and tax bills, along with the canceled checks showing you paid these items.

Source: finance.zacks.com

Category: Taxes

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