What Can Be Deducted If You Itemize?

MEDICAL AND DENTAL EXPENSES

The threshold for these taxpayers is 7.5% of Adjusted Gross Income (“AGI”).

Medical expenses are the costs of diagnosis, cure, treatment, or prevention of a physical or mental illness, disease, or defect. Medical expenses are deductible in the year paid, regardless of when the services were provided. Only amounts paid out-of-pocket with after tax dollars are deductible.

The following items are among those generally deductible as medical expenses:

• Alcohol and drug treatment, including inpatient care
• Ambulance services
• Dental care including cleaning, orthodontia, oral surgery, and dentures
• Education expenses of a physically or mentally impaired individual if the school provides special education for a diagnosed medical condition
• Exercise or weight loss program prescribed by doctor for a specific medical condition
• Eyeglasses, contact lenses and supplies, and laser eye surgery
• Home improvements and specialized equipment if the main purpose is to provide a medical benefit such as ramps and railings or special telephone equipment for hearing impaired
• Hospitalization and medical treatments
• Insurance premiums for medical and dental care (including Medicare)
• Laboratory tests, X-rays, and diagnostics
• Long term care insurance (with limits) and long term care expenses
• Medical equipment and supplies including needles, crutches, bandages, oxygen equipment, prosthetic limbs, wheelchairs, hearing aids and batteries, and guide dogs
• Nursing home care and in-home nursing care
• Prescription medicine and drugs, including insulin
• Services provided by medical professionals including doctors, surgeons, psychiatrists, physical therapists, eye doctors, chiropractors, acupuncturists, etc.
• Smoking cessation programs, with prescription. Drugs that do not require a prescription are not deductible.
• Transportation expenses to obtain medical care including, mileage, parking, tolls, and hotel expenses for overnight stays (per diem limits apply for overnight stays)

Non-Deductible Expenses

• Cosmetic surgery except to correct a deformity due to accident, disease or congenital defect

• Funeral expenses

• Health club dues

• Over-the-counter medicines, medicine purchased from another country, Medical marijuana

• Teeth whitening

• Vitamins and nutritional supplements unless prescribed by a medical professional

TAXES YOU PAID

• State income taxes withheld and/or paid
• Additional tax paid on prior year state return
• State taxes paid on an amended return
• Estimated state taxes paid
• Personal property taxes
• Local income taxes
• Real estate taxes on personal residence, co-op or condo, second home, and all real property owned (not limited to residence and second home)
• Foreign Income Taxes (may be more beneficial to claim a foreign tax credit)
• Auto license fees
• Sales Tax in lieu of state income taxes

INTEREST YOU PAID

• Home mortgage interest and points paid to acquire or improve a primary residence and second home (referred to as Acquisition Debt). Acquisition debt is limited to $1 million ($500,000 if MFS) for determining qualified residence interest. In addition, interest on a maximum of $100,000 of home equity debt may also be deductible. Home equity debt is debt secured by the home that exceeds acquisition debt
• Origination fees or points paid to purchase a home or refinance a loan (Note: Refinanced points may need to be amortized.)
• Investment interest to extent of investment income

GIFTS TO CHARITY

Cash and Non-Cash Contributions to:

• Religious Organizations such as churches and synagogues

• Federal, state and local governments

• Nonprofit schools and hospitals

• Public parks and recreation facilities

• Public Charities such as United Way, Salvation Army, Red Cross, Boy and Girl Scouts, etc.

• War veterans' groups

• Other qualified charitable organizations

Note: Not all "non-profits" qualify. Go to www.lRS.gov/charities for a list of qualifying charities. Deductions for charitable contributions also include:

• Charitable travel miles for charitable organizations or volunteer work (14¢ per mile)

• Charity-sponsored conventions

• Exchange student (transportation and incidentals) up to $50 per month

• Supporting a foster child (expenses exceeding payments)

• Tickets & merchandise purchased - excess of cost over fair market value

• Volunteer out-of-pocket expenses

Note: Your time is not deductible.