MEDICAL AND DENTAL EXPENSES
If you itemize your deductions, these expenses are deductible only when paid by you, and the unreimbursed expenses exceed 7.5% of your adjusted gross income. These expenses include the premiums for insurance that covers the expenses of medical and dental care, and the amounts you pay for transportation for these purposes.
Contributions can be of cash (includes check and credit card donations) or noncash items. If you donate clothes or furniture to a qualified charity, the value of those items may be deductible if they are in good used condition or better. Keep receipts from charity, noting the items donated as well as their fair market value when donated.
Cash contributions, regardless of the amount, require a bank record or written confirmation from the charity.
Your deduction for a car donated to a qualified organization is limited to the gross proceeds from its sale by the organization if the claimed value is more than $500. For a donation valued at more than $500, Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes issued by the charity must be attached to the tax return. Without the Form 1098-C, you cannot deduct your contribution. However, if the organization makes significant intervening use of, or materially improves the car, it will be marked on Form 1098-C and you generally can deduct its fair market value.
Total noncash contributions over $500 require you to complete Section A of Form 8283, Noncash Charitable Contributions. Contributions of noncash items valued at over $5,000 require an appraisal and completion of Section B of Form 8283.
Out-of-pocket expenses when serving as a volunteer for a qualified organization may also be deductions you can take. You can deduct unreimbursed expenses such as the cost of gas and oil that are directly related to the use of the car in giving services to a charitable organization. If you do not deduct actual expenses you can use the standard mileage rate of 14 cents a mile.
CASUALTY AND THEFT LOSSES
If you lose property through a casualty or theft, you may be entitled to a tax deduction. Such casualties would include car accidents, fires, vandalism, disasters such as hurricanes or another identifiable event that is sudden, unexpected or unusual in nature. If your property is covered by insurance, you subtract any insurance or other reimbursement you received or expect to receive when you figure your loss. You claim your casualty or theft loss on Form 4684, Casualties and Thefts.
EMPLOYMENT EXPENSES, FORM 2106 OR 2106-EZ
Use Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses, to figure your deduction for employee business expenses. You can deduct the expenses that exceed 2% of your adjusted gross income. Depending on your employer’s reimbursement arrangement, special rules may apply. If a personal vehicle is used for business purposes, either a standard mileage rate or actual expenses can be claimed. Good written records are required.
Uniforms and Work Clothes
Work clothes and uniforms are deductible if they are required for your job and not suitable to wear outside the workplace. Protective gear such as hard hats and steel-toed boots qualify if necessary for your job.
Work-Related Educational Expenses
You may be able to deduct work-related educational expenses for education that:
- Maintains or improves skills required in your present job or business,
- Serves a business purpose and is required by your employer, or by law or regulation, to keep your salary, status or job.
Your expenses are not deductible if the education is required to meet the minimum educational requirements of your job or is part of a program that will qualify you for a new trade or business. Expenses include tuition, books, supplies, and certain transportation or travel costs.
TAX PREPARATION FEES
The fees paid for the cost of tax preparation, software and tax publication can be deducted. The tax preparation fees are usually be deducted in the year you pay them and are subject to the 2%.limit.
Legal fees such as for an adoption, divorce or property settlement are not deductible. However, legal fees to produce taxable income or to collect taxable income such as alimony or those related to doing or keeping your job are deductible as miscellaneous itemized deductions on Schedule A, subject to the 2% limit.
Liberty Tax professionals are available for your tax needs. Please call your local Liberty Tax office for further information.
What to bring to your Liberty Tax client interview:
PERSONAL INFORMATION FOR EACH
o Date of Birth
o Social Security Card
o Last Year’s Tax Return
o Valid Driver’s License
INCOME AND TAX INFORMATION:
o Interest (1099-INT or substitute)
o Dividend (1099-DIV or substitute)
o Stock Sales (1099-B or Broker Statement)
o Self-Employment Income (1099-MISC or record of payments)
o Sale of a Personal Residence
o Rental Income
o Sale of any Business Assets
o Gambling or Lottery Winnings
o State Income Tax Refund
o Pension Income (1099-R, RRB-1099, CSA-1099)
o Any Estimated Taxes Paid
o Social Security or Railroad Retirement
o IRA or 401(k) Distribution (1099-R)
o Unemployment Compensation
o Medical Expenses
o Real Estate and/or Personal Property Taxes
o Mortgage Interest
o Charitable Contributions
o Employee Business Expenses
o Gambling Losses
o Moving Expenses
o Traditional IRA Contributions
o Certain Education Expenses
o Child Care Provider/Address and Social Security
Number or Employer Identification Number
o Adoption Expenses
o Retirement Savings Contributions