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Deductions Itemized

Deductions Overlooked

If itemized deductions are more than the standard deduction, itemizing will save you more.

You can claim above-the-line deductions whether you itemize or not.

Schedule C filers may qualify for additional deductions.

Higher standard deductions

$5,350 for Single and Married Filing Separately,

$7,850 for Head of Household,

$10,800 for Married Filing Jointly and Qualifying Widower

The statuses above mean that fewer taxpayers benefit from itemizing deductions. The standard deductions are even higher for taxpayers age 65 and older and those who are legally blind. Itemizing generally pays off only if your qualifying expenses total more than the standard deduction for your filing status.

Deductions allow you to reduce your taxable income and also your tax bill. A deduction differs from a credit, which is applied directly to your tax bill, reducing it dollar for dollar. There are 4 major categories of deductions.

Above-the-line Deductions
If you qualify, you can claim these deductions even if you don't itemize.
Student Loan Interest Deduction up to $2,500
Tuition and Fees Deduction up to $4,000 for higher education expenses.
Moving expenses the cost of moving to a new job location
Alimony, the amount of alimony you paid
Military reservists deduction a deduction for non-reimbursable travel expenses for reservists who service more than 100 miles from home and stay overnight
Traditional IRA contributions up to $4,000, $5,000 if your 50 or older.

Self-employment above-the-line deductions:
Half of your self-employment, Social Security and Medicare tax
100% of self-employed health insurance premiums for yourself and family
Contributions to self-employed retirement plans, such as SEPs and SIMPLEs


Schedule C Business Deductions
If you own your own business, some additional deductions apply to you. These are claimed directly on your business schedule, called a Schedule C. Farmers and owners of rental property use Schedule E.
 

Deductions include
home office expenses

advertising and promotional costs
business liability insurance
legal and professional services
car and truck expenses
wages, employment taxes, employee benefit plans and retirement plans
depreciations

For other deductible items, see schedules C and E. There are many rules and limitations pertaining to some of these deductions.

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