When filing taxes, you want to keep as much of your money as possible in your pocket. You can possibly reduce your tax bill by itemizing deductions, a step many taxpayers avoid. Kiplinger reports that missed deductions are a costly tax mistake that causes taxpayers to shortchange themselves. When you know the types of items you can itemize, you can better assess your situation.
Most taxpayers know they can itemize charitable contributions. That $100 you gave to your favorite charity can reduce your tax bill. You might not know, however, that money isn't the only thing considered a charitable donation. Anything donated to charity counts, including objects such as clothes or cars. Items used during charity work count as well. If you baked cookies for a charity fundraiser, the ingredients are a legitimate deduction. You can even get a deduction if you drove your car while doing errands for a charity.
According to the Internal Revenue Service, dental and medical expenses associated with preventing, diagnosing, relieving, or curing physical or mental illnesses are deductible. You're allowed to deduct these expenses for yourself, your spouse and your dependents. You also can itemize money paid for doctors, including dentists, chiropractors, surgeons, psychologists and Christian Science practitioners.
You can itemize job-related educational expenses. Any class that helps improve your job performance or is required to keep your job qualifies. You can't itemize a class if it's something you take to prepare for an impending career change. If you're a graphic designer and take a training class for new graphics software, you can itemize the class. If an accountant takes the same class because she wants to switch careers, then she cannot itemize the class.
If you have a home office used regularly and exclusively for business purposes, you can list it as an itemized deduction. The area must serve as your main place of business or as an area to meet with customers and clients. You also can itemize equipment, such as computers, and office supplies purchased for business use.
- Kiplinger: The Most-Overlooked Tax Deductions
- Internal Revenue Service: Topic 502 — Medical and Dental Expenses
- Internal Revenue Service: Work From Home? Consider the Home Office Deduction.
- Internal Revenue Service: IRS Announces Simplified Option for Claiming Home Office Deduction Starting This Year