Income Tax Deductions
Car and Truck Expenses
Car and truck expenses can be tax-deductible if you drive your car for business, medical, or charitable purposes. Learn more about what expenses are deductible, and what records to keep, and how to report this on your tax return.
Taxpayers can opt to take a standard deduction (a flat dollar amount that reduces taxable income) or itemize their deductions instead. The standard deduction amount varies by a person's filing status, age, and whether they are blind.
Education Tax Breaks
The federal government provides several tax incentives for college students and their parents. Here's an overview of the key tax breaks for pursuing post-secondary education.
Moving Expenses Tax Deduction
If you moved to start a new job, or to seek work in a new city, you may be able to deduct the cost of your moving expenses from your income. Moving expenses are subject to a time and distance test. Find out if you qualify to deduct your moving expenses.
IRA Deduction (Traditional Individual Retirement Account)
Contributions to a traditional, tax-deferred individual retirement account (IRA) can be deducted against income taxes. Up to $5,500 can be contributed to an IRA for 2013.
Classroom Expenses Deduction
If you are a teacher, and you paid for classroom supplies and other materials out of your own pocket, you can claim those expenses on Form 1040 line 23.
Adjustments to Income
A list of the various adjustments to income. These are reported on the first page of Form 1040.
Donations of cash and property to qualified non-profits are tax deductible. To be deductible, taxpayers must keep records of their contributions, especially of any gifts over $250. For non-cash contributions, taxpayers must keep records indicating the value and condition of the property given to charity.
Tuition and Fees Deduction for College Expenses
Taxpayers can deduct up to $4,000 per student using the tuition and fees deduction.
Alimony Paid Deduction
Alimony paid to a former spouse is tax-deductible, as long as certain requirements are met.
Health Savings Account Deduction
You can take an above-the-line tax deduction for contributions to a qualified health savings account (HSA) plan if you are covered by a high-deductible health insurance plan, and you are not covered by any other health insurance plan.
Self-Employment Health Insurance Deduction
Self-employed persons can deduct the full cost of health insurance premiums. The deduction is taken on Form 1040 as an adjustment to income, and reduces the federal income tax but not the self-employment tax.
Mortgage Interest Tax Deduction
Mortgage interest is a tax-deductible expense. Mortgage interest is reported on Form 1040, Schedule A along with other itemized deductions. Taxpayers paying mortgage interest should fill out Schedule A to see if their itemized deductions exceed their standard deduction. If so, taxpayers will save more money on their taxes by itemizing.