Itemized Deductions- Medical, Taxes, Interest Flashcards
What do itemized deductions primarily consist of?
-Non trade business expenses (employee and investment expenses)
What are the six types of personal expenses that may be itemized?
- Medical expenses
- Interest
- Taxes
- Charitable contributions
- Casualty losses
- Miscellaneous deductions
Where are itemized deductions reported?
-On Form 1040 Schedule A
What are additional amounts added to the standard deduction available for?
-Over age 65 or blind
If one spouse itemizes is the other required to also?
-Yes. They must file consistently
Unreimbursed medical expenses must exceed what % of AGI to be deductible?
-10% (7.5% if over 65 yrs old)
What are non deductible medical expenses?
-Funeral and burial expenses, nonprescription drugs, bottled water, toiletries, cosmetics, health spas, unnecessary cosmetic surgery
If a medical related capital expenditure increases the FMV of the property, what amount is deductible?
-Excess expense above increase in FMV
When are medical expenses deductible?
-Only when paid and after treatment received unless prepayment required by provider
What taxes are deductible as itemized deductions?
-Property taxes and income taxes imposed by state, local , and foreign governments
For cash basis taxpayers, when are taxes deductible?
-When paid or withheld
What taxes are not deductible?
-Federal, death, excise, and sales taxes
Are special assessments deductible?
-No. Only if for repair or maintenance of the property
Are fees and licenses (dog, automobile, hunting and fishing) deductible?
-No
What are the limitations for deductions on home mortgage interest (only allowed for first and second personal residence)?
- Interest on maximum of $1 million of acquisition indebtedness deductible if used to purchase, construct, or improve the residence
- Interest on the lower of $100,000 or equity in the home deductible regardless of how proceeds were used
