Tax Deductible Expenses

Tax deductible expenses are an issue we are always willing to listen to. Why? Because we are always looking for a way to get more money back on our refund checks.

If you are employed, whether it be working for someone or working for yourself, you are looking for ways to keep from paying out more. Well, you have come to the right place!

Below I will list several topics for tax deductions; each one will have a link to the exact page on the IRS’s web site that explains it to you. I am doing this for one reason. When it comes to something as important as your taxes, I want you to have perfectly correct and up to date information, so I have done all the research for you.

Good Luck and Happy Tax Season Please check out the frequently asked tax deductible expenses question's close to the bottom of the page.

1. Should I Itemize?

Generally, you must decide whether to itemize deductions or to use the standard deduction. You should itemize deductions if your allowable itemized deductions are more than your standard deduction. Some taxpayers must itemize deductions because they do not qualify for the standard deduction..... More


2. Tax Deductible Expenses; Medical and Dental Expenses

If you itemize your deductions on Form 1040, Schedule A (PDF), you may be able to deduct expenses you paid that year for medical care (including dental) for yourself, your spouse, and your dependents. A deduction is allowed only for expenses primarily paid for the prevention or relief of a physical or mental defect or illness. Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or treatment affecting any structure or function of the body. The cost of drugs is deductible only for drugs that require a prescription, except for insulin..... More


3. Deductible Taxes

There are five types of deductible nonbusiness taxes: State, local and foreign income taxes Real estate taxes Personal property taxes State and local sales taxes, and qualified motor vehicle taxes. To be deductible, the tax must be imposed on you and must have been paid during your tax year. However, tables are available to determine your state and local general sales tax amount. Refer to Form 1040 Instructions for more information. Taxes may be claimed only as an itemized deduction on Form 1040, Schedule A (PDF)..... More


4. Tax Deductible Expenses; Home Mortgage Points

The term "points" are used to describe certain charges paid to obtain a home mortgage. Points are prepaid interest, and may be deductible as home mortgage interest, if you itemize deductions on Form 1040, Schedule A (PDF). If you can deduct all the interest on your mortgages, you may be able to deduct all the points paid on the mortgage. If your increase debt exceeds $1 million or your home equity debt exceeds $1,000,000, you cannot deduct all the interest on your mortgage, and you cannot deduct all your points..... More

5. Tax Deductible Expenses; Interest Expense

Interest is an amount you pay for the use of borrowed money. To deduct interest you paid on a debt you must be legally liable for the debt. Additionally, you generally must itemize your deductions, unless the interest is on rental or business property or on a student loan. If you prepay interest, you must allocate the interest over the tax years to which it applies. You may deduct in each year only the interest that applies to that year. However, there is an exception that applies to points paid on a principal residence..... More


6. Tax Deductible Expenses; Contributions

Charitable contributions are deductible only if you itemize deductions on Form 1040, Schedule A (PDF). To be deductible, charitable contributions must be made to qualified organizations..... More


7. Tax Deductible Expenses; Casualty and Theft Losses

Generally, you may deduct casualty and theft losses to your home, household items and vehicles on your Federal income tax return. You may not deduct casualty and theft losses covered by insurance, unless you file a timely claim for reimbursement, and you must reduce the loss by the amount of the reimbursement More


8. Tax Deductible Expenses; Miscellaneous Expenses

There are three types of expenses that are subject to the 2% limit. They are unreimbursed employee expenses, tax preparation fees and other expenses..... More


9. Tax Deductible Expenses; Business Use of Home

Whether you are self-employed or are an employee, you may be able to deduct certain expenses for the part of your home you use for business despite the general denial of business expense deductions for the home. To deduct expenses for business use of the home, part of your home must be used regularly and exclusively as one of : The principal place of business for your trade or business, the place where you meet and deal with your patients, clients, or customers in the normal course of your trade or business; or in connection with your trade or business,..... More


10. Tax Deductible Expenses; Business Use of Car If you use your car in your job or business, and you use it only for that purpose, you may deduct its entire cost of operation (subject to limits discussed later). However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use..... More


11. Tax Deductible Expenses; Business Travel Expenses Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Generally, employees deduct these expenses using Form 2106 (PDF) or Form 2106-EZ (PDF) and on Form 1040, Schedule A (PDF). You cannot deduct expenses that are lavish or extravagant or that are for personal purposes..... More


12. Tax Deductible Expenses; Business Entertainment Expenses

Entertainment expenses that are both ordinary and necessary in carrying on a trade or business may be deductible if they meet one of the two tests..... More


13. Tax Deductible Expenses; Educational Expenses

You may be able to deduct work–related educational expenses paid during the year as an itemized deduction on Form 1040, Schedule A (PDF). To be deductible, your expenses must be for education that (1) maintains or improves your job performance, or (2) is required by your employer or by law to keep your salary, status or job. Also, the education cannot part of a program that will qualify you for a new trade or business..... More

If you are an employee, you may be able to deduct your work–related expenses as an itemized deduction (subject to limitations) on Form 1040, Schedule A (PDF). Additional information on this subject can be found in the instructions for the Form 1040, Schedule A. Also, you may refer to Topic 511 for additional information on business travel expenses..... More


15. Tax Deductible Expenses; Casualty, Disaster, and Theft Losses

A casualty loss can result from the damage, destruction or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption. A theft is the taking and removing of money or property with the intent to deprive the owner of it. The taking must be illegal under the law of the state where it occurred, and it must have been done with criminal intent. If your property is not completely destroyed, or if it is a personal-use property, the amount of your casualty or theft loss is the lesser of the adjusted basis of your property or the decrease in fair market value of your property pursuant to the casualty or theft..... More

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