by Alden SmithLet's face it - tax time is excruciating for everyone. Not only does the law change each year, but the deductions and other parameters change also. It is difficult to keep up with, and knowing what your standing on taxes is brings a lot of relief. This article will focus on deductions and tips to give you more peace of mind when it is time to do your taxes.
Keeping Current On Deductions
The IRS doesn't want to hear that you didn't know about the newest tax law. It is your responsibility to stay current on tax laws and deductions, even if you do your own taxes. Let's look at deductions, and how to use them to advantage. Because most everyone knows about standard deductions, we will focus on little-known ones.
1. Damage to neighboring property -- tax laws state that you cannot take a deduction for this unless your own property is damaged as well as neighboring property.
2. Damage to your automobile -- unreimbursed accident damage may be a deductible casualty loss.
3. Mortgage service fees are not deductible. the only time that they are is when the points on the purchase of a principal residence must be prepaid interest for the use of the loan money. You can't deduct the application fees or other service related items.
4. Long term health insurance -- you are allowed to claim unreimbursed expenses for long term care services. The deductions are subject to the 7.5% AGI (Adjusted Gross Income) floor. Also, depending on your age, all or part of the premiums for a qualified policy can be included in your medical expenses.
5. You cannot claim deductions for loss prevention devices. If your home has a sophisticated alarm system or a subscription service for protection, you can't deduct these expenses.
6. Disability job-related treatments can be deducted if therapy or treatment will enhance your ability to work. These are treated as a business expense.
7. The cost of meals at a nursing home are deductible, but you cannot take a deduction for meals when you must travel for health reasons, such as a long distance to a hospital. The mileage you accrue is deductible, but meals are not. The IRS figures you would have to eat anyway. In a nursing home, the patient can deduct the price of housing and meals, again according to the guidelines of the AGI floor.
8.. You can deduct the cost of a private nurse even if the nurse is not registered. The person must perform medical services, such as a therapist helping to overcome an injury, or someone who takes blood pressure or performs other services. If housekeeping services are provided, you can only deduct the portion of the provider's pay for the medical services provided.
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