Below The Line/Itemized Deductions

Question 1

Itemized Deductions are on filled out on

Answer 1

SCHEDULE A

Question 2

You can claim either the standard deduction for your filing status, or you can itemize your qualifying individual deductions

Answer 2

Choose the one which takes the most off of your tax bill (whichever is higher)

Question 3

Documentation to prove legitimacy of itemization claims can include

Answer 3

bank statements, check stubs, property tax statements, insurance bills, medical bills, and acknowledgement letters for charities to which you might have donated.

Question 4

Non-resident aliens must items

Answer 4

MFS must choose the same method for both returns

Question 5

Medical Expenses not covered by insurance for

Answer 5

taxpayer, spouse or dependents

– if paid on credit card, it is also deductible

Question 6

Medical Expenses > 10% of AGI

Answer 6

counts as below the line deduction

Question 7

General wellness such as weight-loss institute or health club

Answer 7

IS NOT DEDUCTIBLE

Question 8

ONLY PRESCRIBED MEDS (and insulin)

Answer 8

can be deducted

Question 9

Premiums for medical care expenses

Answer 9

can be deducted

Question 10

Construction or addition of permanent property equipment for medical needs can be deducted IF

Answer 10

cost of construction exceeds increase on property value (excess is deductible)

Question 11

State, Local and Foreign Real Property Taxes

Answer 11

can be deducted

Question 12

State Income Tax

Answer 12

is deductible

Question 13

No PERSONAL INTEREST

Answer 13

but Investment Interest on any debt incurred to acquire an investment property

Question 14

MORTGAGE INTEREST (done on Form 1040)

Answer 14

You can write off interest on mortgages of up to $1M

You can write off interest on mortgage debt that’s used to pay for something else (up to $100,000 of the debt)

Question 15

Charitable Contributions

Answer 15

30 to 50% off AGI

• • can include cash or property
• – canceled checks, acknowledgement letters, etc are needed for proof
• • contributions must be made to 501 C3s only (NO political parties, chambers of commerce, foreign gov’ts, for profit schools, labor unions)

Question 16

If non-cash item contributions are being made to charity

Answer 16

then you can estimate the value on form 8283

– value of services is not deductible

Question 17

Casualty / Theft Losses

Answer 17

• must incur loss > $100 per loss event

- do not include any property that is covered by insurance if the insurance company reimburses you for the loss.

Question 18

Loss 1 - $100 = adjusted loss 1a
Loss 2 - $100 = adjusted loss 2a
total losses = loss1a +loss2a
AGI * 10% = AGIlossThreshold
TotalLoss - AGILossThreshold = LOSS DEDUCTIBLE AMOUNT

Answer 18

The loss must exceed $100 and can be deducted only to the extent that they exceed 10% of adjusted gross income.

Question 19

ALSO DEDUCTIBLE: miscellaneous expenses that exceed 2% of your income

Answer 19

such as: union dues, tools and supplies needed for work, tax preparation fees, and certain legal fees