Common Deductions

Above the line deductions

• Teacher classroom expenses
• Student loan interest
• Alimony expenses
• One-half of self-employment tax
• IRA contributions and one-half of contributions to SEP, SIMPLE and qualified plans
• Health savings account contributions
• Moving expenses
• Penalties on early withdrawals from savings accounts
• Tuition and fees deductions

Itemized deductions 

• Mortgage interest including interest on equity loans up to $100,000
• Points paid for mortgage or refinancing
• State and local income taxes and personal property taxes
• Sales taxes in states with no income tax
• Health insurance costs and medical expenses in excess of 7.5% of adjusted gross income (AGI)
  • Crutches, canes and orthopedic shoes
  • Medical transportation
  • Cost of alcohol or drug abuse treatment
  • Deductible to the extent the total of all medical and dental expenses exceeds 7.5% of AGI
  • Prescription eyeglasses, contacts and hearing aids
• Charitable contributions – cash, property, donated clothing or household items and appreciated long-term assets
• Mileage and expenses associated with volunteer work
• Unreimbursed casualty and theft losses
• Income-tax preparation software and fees*
• Job-search expenses*
• Investment expenses*
• Unreimbursed employee business expenses*
• Professional investment advisory fees*
• Deductible to the extent the total of all medical and dental expenses exceeds 7.5% of AGI
• Deductible as miscellaneous itemized deductions to the extent the total exceeds 2% of AGI

This article was provided by the American Institute of Certified Public Accountants (AICPA).