Taxpayers can take deductions for home mortgage interest, real estate taxes and charitable contributions of cash and goods, according to TurboTax. Individuals who pay state income taxes can deduct those amounts from their federal returns, and people who don’t pay state taxes can deduct their sales taxes.Continue Reading
The mortgage interest deduction covers interest and points that owners pay for loans on first and second homes. Boats and camping trailers also count as homes if they include bathroom, cooking and sleeping facilities, notes the Internal Revenue Service. Taxpayers can take the deduction even if they rent out the second home for a portion of the year. The IRS limits this deduction to a maximum of two homes.
In addition to deducting gifts of cash or goods to charity, taxpayers who volunteer for charitable organizations can deduct costs they incur, adds TurboTax. For instance, taxpayers can deduct mileage if they drive for the organization, and they can deduct supplies they purchase for fundraising efforts, such as ingredients for a bake sale.
Medical and dental expenses for those under age 65 are deductible only if they exceed 10 percent of adjusted gross income, which means that few taxpayers can take advantage of this deduction. Taxpayers can’t deduct the cost of health care insurance premiums if they pay those premiums with pre-tax money, explains TurboTax.Learn more about Taxes