If you itemize your taxes, you can deduct your mortgage interest; state and local taxes; charitable donations; and medical expenses that exceed 10 percent of your adjusted gross income, explains TurboTax. If you claim the standard deduction, you deduct a set figure determined by the Internal Revenue Service.Continue Reading
Specific medical and dental expenses that are deductible include some health insurance premiums and long-term care insurance policy payments, explains the IRS. Additional qualifying medical deductions include payments to certain doctors and medical practitioners, inpatient treatment for drug and alcohol rehabilitation, and transportation costs associated with traveling to receive medical care. Payments for insulin equipment, false teeth, prescription eyewear, hearing aids and wheelchairs are also deductible.
Some home expenses are deductible as long as at least part of the home is used for certain business purposes, notes the IRS. Some actions that may qualify the home as a deduction include using the home as the exclusive location for business transactions, as a regular location for storage of business items, or as a rental or daycare facility.
Education expenses that may qualify as deductions include some travel and transportation costs, as well as the cost of typing and research. Books, lab fees, tuition and school supplies are additional items that may qualify as deductions, advises the IRS.
Tax payers may also deduct smaller items such as union dues, work clothing, business liability insurance premiums and job training costs, but these items can only be deducted if they exceed 2 percent of the tax filer's adjusted gross income. Only the amount that exceeds that percentage can be deducted, according to Bankrate. Therefore, if your adjusted gross income is $40,000, 2 percent of that amount is $800. If your miscellaneous expenses equal $900, you can deduct $100.
To determine if you should claim the standard deduction or itemize your deductions, add up the value of your itemized deductions and compare that total to the standard deduction for the year. The highest number represents the most advantageous deduction, according to TurboTax. The standard deduction changes annually, but as of 2013, the standard deduction is $6,100 for a single person, $12,200 for a married couple or $8,950 for a head of household, reports H&R Block.Learn more about Taxes