Itemized Deductions
If your deductible personal and family expenses, as defined
by the IRS, add up to more than the standard deduction for your filing
status, and you have the records to prove them, you should
itemize your deductions instead of claiming the standard deduction.
To do that, you'll have to file Form 1040, and complete Schedule
A and attach it to your tax return.
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Tip As a general rule, most taxpayers who own
their own homes will come out ahead by itemizing. Those who don't
are unlikely to be able to itemize unless they have extraordinary
amounts of medical expenses, charitable gifts, or casualty losses
during the year. |
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In 2014, certain itemized deductions
are limited (up to 80%) if adjusted gross income (AGI) exceeds
$305,050 for joint filers, $152,525 for married filing separately,
$279,650 for heads of households, or $254,200 for single filers.
However, deductions for medical and dental expenses, investment interest
expenses, casualty and theft losses of personal use property, casualty
and theft losses of income-producing property, and gambling losses
are not subject to this overall limit on itemized deductions.
Schedule
A divides your itemized deductions into six major categories:
Interest. Two major categories of interest
payments are deductible on Schedule A: qualified home
mortgage interest, and investment interest.
Some
other types of interest are deductible in other places on your tax
return. Business-related interest payments are
deducted on Schedule C, interest on rent-producing property is deductible
on Schedule E, and qualified
student loan interest is deductible on Line 33 of your Form 1040.
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