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Itemized deductions can reduce your taxable income, potentially saving you money on your tax bill. Knowing which deductions you qualify for can help you maximize your savings. Here are ten common itemized deductions to consider.
Medical and Dental Expenses
Expenses for medical and dental care that exceed 7.5% of your adjusted gross income (AGI) may be deductible. This includes payments for doctors, dentists, prescriptions, and certain insurance premiums.
State and Local Taxes
You can deduct state and local income taxes, sales taxes, and property taxes. The total deduction for these taxes is capped at $10,000.
Mortgage Interest
Interest paid on a mortgage for your primary residence or a second home is deductible. This includes interest on loans up to $750,000 for new mortgages taken out after December 15, 2017.
Charitable Contributions
Donations to qualified charitable organizations are deductible. Keep receipts and records of your contributions to claim these deductions.
Casualty and Theft Losses
Losses from theft, fire, or natural disasters that are not reimbursed can be deducted if they exceed a certain threshold. Documentation of the loss is required.
Unreimbursed Job Expenses
Expenses related to your job that are not reimbursed by your employer, such as travel, uniforms, and tools, may be deductible if they exceed 2% of your AGI.
Investment Expenses
Costs related to managing your investments, including advisory fees and certain transaction costs, can be deducted if they are itemized separately.
Educational Expenses
Some education-related expenses, such as student loan interest and qualified tuition, are deductible or can qualify for credits. Check specific eligibility criteria.
Miscellaneous Deductions
Other deductions include gambling losses (up to winnings), investment interest, and certain hobby expenses. These are subject to specific rules and limits.