Itemized Tax Deduction Instructions & Help
- Can I deduct my gambling losses?
- What if I make an IRA contribution in 2015?
- What are miscellaneous expenses not subject to the 2% limitation?
- Is my scholarship or grant taxable?
- What if I don't know how much sales tax I paid during 2014?
- What is 1099-Q income?
- Is my state refund taxable?
- Do I need to enter my household employee wages as Other Income if I received a W-2 (W2)?
- Why do I need to enter my Roth IRA contributions?
- What types of retirement contributions are eligible for the Retirement Savings Contributions Credit?
- Where can I get my total basis in IRAs for 2013 and earlier years?
- Where can I get my spouse's total basis in IRAs for 2013 and earlier years?
- What are deductible personal property taxes?
- Donations to Charities
- How do I value my clothing donations?
- Medical Expenses
- Job Expenses
- What if my employer reimburses my job expenses?
- Can I include 401K contributions as IRA contributions?
- What types of income are NOT taxable?
For example, if you report $5,000 in gambling income on your W-2G, you can deduct up to $5,000 of your gambling losses. If you use the Standard Deduction instead of Itemized Deductions, gambling losses cannot be deducted.
Contributions postmarked on or before April 15th are considered to be made by the deadline.
- Amortizable bond premium on bonds acquired before October 23, 1986
- Federal estate tax on income in respect to a decedent
- Impairment-related work expenses of a disabled person
- Deduction for repayment of amounts under a claim of right if over $3,000
- Certain unrecovered investment in a pension
- Loss from other activities from Schedule K-1 Box 2
If a scholarship or grant is taxable, you will generally receive a W-2 (W2) with the taxable amount on it. If you didn't receive a W-2 (W2), enter only the amounts you used for expenses other than tuition and course-related expenses. For example, amounts used for room, board, and travel are taxable income.
If you do not know the actual amount of sales tax you paid during the year, you can use the Sales Tax Deduction Calculator on the IRS website or you can use the Sales Tax Worksheet in the Schedule A instructions which can be downloaded from the IRS website.
If your qualified education expenses during the year are less than the 529 plan distribution shown in Box 1 of the 1099-Q, then part of the distribution may be taxable. Only the portion of the distribution that is earnings is taxable income, and only those earnings that are allocated to the part of the distribution that was not used for education expenses is taxable.
For example, if your 1099-Q Box 1 shows a distribution of $10,000 and box 2 shows earnings of $2,000. Then if you did not use any of the $10,000 for qualified education expenses, then the full $2,000 in earnings is taxable income that you should enter on the Other Income screen as miscellaneous income. Use a description of "1099Q taxable income" in the miscellaneous income description box.
Continuing with the example, if you had $5,000 in qualified education expenses instead of zero, then only $1,000 of the $2,000 in earnings reported on Box 2 of the 1099-Q would be reported as taxable income on your return. If you had $9,000 in qualified education expenses then you would only report $200 of the $2,000 as taxable income (only $1,000 out of the $10,000 distribution wasn't used for education expenses so only 10% of the earnings in Box 2 are taxable).
The Retirement Savings Contributions Credit is only available to taxpayers with adjusted gross incomes of $60,000 or less for Married Filing Jointly, $45,000 for Head of Household, and $30,000 for Single taxpayers.
What types of retirement contributions are eligible for the Retirement Savings Contributions Credit?
- Contributions made to a qualified organization.
- Unreimbursed out of pocket expenses (office supplies, uniforms, long distance phone calls, etc.) for volunteer work for a qualified organization
- Transportation expense for work on behalf of a charitable organization
Nondeductible charitable contributions:
- Contributions made to unqualified organizations
- Contributions made directly to needy individuals
- The value of service that you perform for a charitable organization
You cannot take a deduction for clothing you donate unless the clothing or household items are in good used condition or better.
The definition of what constitutes a medical expense is very broad and includes expenses to diagnose, cure, mitigate, treat, or prevent disease. However, cosmetic surgery is not deductible unless it is related to disfigurement from a congenital abnormality, accidental injury, or a disfiguring disease. Other examples of nondeductible medical expenses are nonprescription drugs, doctor prescribed travel for "rest", and expenses for the improvement of your general health such as a weight-loss program or health club fees (the weight-loss program is deductible if it is to treat a specific disease).
Examples of deductible medical expenses include abortions, acupuncture, alcoholism treatment, ambulance costs, birth control pills, child birth classes, chiropractors, contact lenses, crutches, dentist, dentures, doctor fees, drug addiction treatment, prescription drugs, dyslexia reading programs and tutors, eye examination and glasses, guide dogs, health insurance, hearing aids, hospital bills, insulin, laboratory fees, long-term care insurance, nursing home if for medical treatment, optometrist, osteopath, physical therapy, psychiatrist, psychologist, travel to medical clinics, vasectomy, and wheelchair. This list does not contain every medical deduction available.
The following income is generally NOT taxable income. There are always exceptions. For example, inheritances are generally not taxable, but if you inherited an IRA account, you will be taxed when you receive IRA distributions. But for most people, these types of income are NOT taxable:
- Life insurance proceeds
- IRA and Pension rollovers
- Child support payments
- Workers Compensation
- Disability payments if you paid the premiums on the policy. If your employer paid the policy, then the disability payments are taxable. If you paid part of the policy, then part of the disability payments you paid are nontaxable.
- Court damages for personal physical injuries or physical sickness. Punitive payments are taxable.
- Health and accident benefits
- Federal income tax refund
- State income tax refund (if you took the standard deduction last year)
- Most scholarships, fellowships, and Pell grants
- Foster care payments (certain restrictions for individuals over age 18 in foster care)
- Gain on the sale of your personal residence is usually nontaxable. The gain might be taxable if you lived in the residence less than two years or if the residence has ever been used as a rental property or home office
- Roth IRA qualified distributions
- Welfare payments
- Supplemental Security Income (SSI)
- Social security benefits are either nontaxable or partially taxable. Enter your social security benefits on the Social Security Benefits screen and we'll calculate how much, if any, of your benefits are taxable
- Cancellation of debt because of bankruptcy or insolvency. Enter your 1099-C or 1099-A on the Canceled Debt screen and we'll calculate how much, if any, of the canceled debt is taxable
- Veterans Administration disability benefits
- Pay-for-Performance Success Payments that reduce the principal balance of your home mortgage under the Home Affordable Modification Program
- Black lung benefits
- Cash rebates. For example, if you receive a cash rebate of $100 after you purchase a new washing machine
- Insurance proceeds for theft or damage to your property
- Utility rebates
- Long-term care insurance benefits
- Military allowances
- Peace Corps living allowances
- Reimbursement for medical care