Blue Flower

Deductions for an Individual or Personal 1040 Tax Return are very limited.

Basic deductions:

  • Standard Deductions: Single $6,300 or Married $12,600 (Add $1,200 for one spouse age 65 or older and $2,400 if both are age 65 or older.) 
  • Personal Exemptions for you and each dependent: $4,000

These deductions are reduced and/or eliminated as Adjusted Gross Income exceeds $250,000.

Itemized Deductions can be taken instead of the Standard Deduction for those who have a significant combination of medical expenses, sales tax, real estate taxes, mortgage interest, etc. above the Standard Deduction amounts listed above.

Itemized Deductions:

  • Medical Expenses - all out of pocket prescription drugs, insurance premiums, long term care premiums, doctors, dentists, mileage to receive medical care, hospitals, glasses, etc.
  • Sales Tax - actual sales tax paid during the year based on actual receipts retained or the percentage allowed by the IRS plus sales tax paid for a vehicle.
  • Property Taxes - real estate taxes paid for primary residence and a second home.
  • Mortgage Interest - interest paid on a primary residence and second home.
  • Charitable Contributions - amounts paid to registered non profit organizations like a church, Goodwill, school, etc. Not to be confused with a gift to a relative or friend. This can also include donation of goods like clothing and furniture.
  • Casualty or Theft Loss - loss due to a fire, flood, etc. not reimbursed by insurance protection. The amount is usually in excess over 10% of Adjusted Gross Income. There are some exceptions like a declared federal disaster area.  
  • Unreimbursed Employee Business Expenses - amounts you were required to spend for your employment and not reimbursed by your employer. This could include uniforms, boots, mileage (not commute to work), etc.
  • Other - gambling losses, certain legal fees, investment fees, etc.

IRAs can be deducted if your employer does not have a retirement plan. Look on your W-2 Wage statement and if the Retirement Box is marked then you can only participate in your employers retirement plan. The most an individual may contribute to their IRAs annually is $5,500 and if you are age 50 or older it is $6,500.

Call us at (386)-668-3328 if you have any questions.