| One of the most misunderstood areas of income | | | | residences, but you must actually live there. Primary |
| taxation is the fact the IRS allows you to deduct | | | | residence and summer home, for example. |
| certain expenses from your income before you | | | | 3. Certain state and local taxes |
| calculate the taxes you owe. The vast majority of | | | | Income taxes, real estate taxes and taxes on personal |
| people opt to take the standard deduction that is | | | | property are all deductible. |
| provided. This deduction is adjusted annually for | | | | 4. Charitable contributions |
| inflation. This is all well and good, but a lot of taxpayers | | | | You are entitled to take an income tax deduction |
| shortchange themselves by taking this deduction. | | | | anytime you give money or property to a charitable |
| Some feel it's too complicated to deal with, or that it | | | | organization. But, you've got to keep very accurate |
| will end up causing an audit. But understand, that you | | | | records when taking this type of deductions. Receipts |
| can save substantial amounts of money by itemizing | | | | or cancelled checks are important here. |
| your deductions. And with software packages such as | | | | 5. Casualty losses |
| Turbo Tax, it's not all that difficult to do. | | | | If your home burns down or is otherwise damaged or |
| The 6 key deductions you may be qualified to take | | | | destroyed, you will be able to get some tax relief. |
| include: | | | | Check with your CPA or tax advisor to see how |
| 1. Medical Expenses | | | | much you can deduct. |
| This not only includes doctor and hospital bills. It includes | | | | 6. Miscellaneous itemized deductions |
| certain travel expenses, education expenses for | | | | Most of these costs, such as tax prep fees, safe |
| learning disabled children, wigs for chemotherapy | | | | deposit box rentals, union dues and investment advice |
| patients, guide dogs and even clarinet lessons to | | | | are deductible, but you've got to subtract 2% of your |
| alleviate severe malocclusion. The point here is that | | | | adjusted gross income from the total for this category. |
| there are many, many medical related expenses you | | | | Certain deductions are no allowed, such as haircuts |
| can deduct. | | | | and gambling losses. Check with your CPA or tax |
| 2. Home Mortgage Interest | | | | advisor as to what you can and can't deduct. |
| You can deduct interest on your first and second | | | | |