Saturday, February 22, 2014

2014 tax saving strategies - itemizing

Davette Lynne Hrabak writes: You may be wondering just what is included in an itemized deduction. Can I itemize?

Everyone’s tax situation is different. However, there are a number of things that a person can gather together to see if itemizing might work for them. The larger in dollar amount of any items, or the more items a person has, the greater the chance that the taxpayer will be able to itemize.  Below is a list of some of the more common items that are used in computing the itemized deduction.  The list is not all inclusive but a good place to start to see if it is likely that it would be a benefit to you.

Although individual deductions for itemized deductions are subject to limits that are dependent on personal circumstances, there are quite a few areas that may qualify for a taxpayer as itemized deductions:
* Unreimbursed casualty and theft losses
* Charitable contributions: Cash, property, donated clothing or household items and appreciated long-term assets
* Unreimbursed employee business expenses
* Gambling losses
* Health insurance costs and medical expenses (for a complete list, contact a CPA). The amount is deducted after insurance reimbursements. All items in this category are deductible to the extent of the total of all medical and dental expenses that exceed 7.5 percent or 10 percent of Adjusted Gross Income, depending on age.
-- Alcohol or drug abuse treatment
-- Annual physical
-- Crutches, canes, and orthopedic shoes
-- Medical transportation
-- Orthodontia
-- Prescription eyeglasses, contact lenses, and hearing aides
* Mileage and expenses associated with volunteer work
* Mortgage interest (including interest on equity loans)
* Points paid for a mortgage or refinancing
* Taxes: State and local income and personal property
* Miscellaneous itemized deductions are deductible to the extent that the total exceeds 2 percent of Adjusted Gross Income.
-- Income tax preparation
-- Investment expenses
-- Job search expenses
-- Professional investment advisory fees
-- Unreimbursed employee business expenses
Additional areas and items may also be deductible. Contact a CPA for further details.
As with all types of tax situations, many factors on a return interact with other items. Therefore, it is always best to give a CPA all of the information you can so that your particular situation can be reviewed to discover the credits and deductions for which you qualify.
When the right tax and financial advice is essential, talk to someone with an unmatched level of knowledge, experience and education. A CPA understands the business of taxes and finance and can provide trusted advice and services during tax season and throughout the calendar year.