Tax Deduction Checklist

Audrey M. Jones
Keys, calculator and notepad

Each year, hundreds, if not thousands, of dollars of deductions are available to taxpayers. Tax Topic 500, titled "Itemized Deductions", categorizes these deductions by type: medical, taxes, home mortgage points, interest expenses, charitable contributions, business, education and casualty losses. Tax Topics 501-515 describe the deductions falling within each category, including the elements a deduction must meet and the maximum amount of the deduction.

Checklist for Federal Tax Deductions

  • Health Insurance Premium Payments: These amounts are deductible, but only if the taxpayer is not eligible to join a group-oriented insurance plan. It includes premiums for medical, dental, vision and long-term care policies.
  • Medical Supplies or Equipment: The cost of medically necessary or prescribed equipment is deductible. The medical supplies or equipment category includes crutches, prescription eyeglasses, contact lenses, splints or other support devices, breast pumps and pregnancy tests. It also includes prescription medicine costs.
  • Physician Visits or Hospital Stays: Any out-of-pocket cost incurred for diagnosis or treatment of a medical or mental condition is deductible. This category includes payments to medical professionals or facilities, diagnostic tests, ambulance transportation, surgery required for breast reconstruction after a mastectomy and some fertility treatments.
  • Health Savings Plans: Taxpayers may deduct the amount of any deposits made to a health savings or other similar account. Some employer contributions to these accounts are also deductible.
  • Real Estate Taxes: Payments to state or local agencies for real estate taxes are deductible. It is irrelevant whether the property is the taxpayer's main residence.
  • Mortgage Interest Payments: The portion of any mortgage payments dedicated to interest on the loan is deductible. This deduction is available on any property, regardless of whether it is the taxpayer's main residence.
  • Home Equity Interest Payments: Interest payments paid on a home equity mortgage acquired for the purposes of making home improvements are deductible.
  • Medical or Energy-Efficient Home Improvements: The Internal Revenue Service (IRS) allows taxpayers to deduct a reasonable amount for the costs of any home improvements made to their main residence for medical purposes or to increase the home's energy efficiency. There are strict limitations on the maximum deductible amounts.
  • Improvement Costs for a Rental Property: A residential property owner and landlord can deduct the costs of any improvements made to the rental property. Only a reasonable amount is deductible.
  • State Sales or Income Tax: The IRS allows taxpayers to deduct either state sales or income tax. Usually, income tax is the larger of the two, and is therefore most commonly deducted. Residents in states with no income tax may deduct the state sales tax they paid over the last year.
  • Interest on Student Loans: Like interest payments on mortgages, interest payments on student loans are deductible. There is no maximum amount for these deductions.
  • Education Expenses: Students or the individual paying for the student's education can deduct the costs of books, transportation and other education-related expenses. These deductions are limited to two percent of the taxpayer's adjusted gross income.
  • Continuing Education Costs: Taxpayers can deduct the cost of any classes, pamphlets or other education expenses related to continuing education requirements in their current field.
  • Job Hunting Expenses: The costs of subscriptions or placement agency charges for a job search within the taxpayer's current field are deductible. These expenses are not deductible if the taxpayer switched job fields.
  • Home Business Costs: Self-employed, work-at-home or freelance workers can deduct the costs of supplies and transportation. They can also deduct the percentage of their mortgage representing the space used in their home for their office.
  • Uniforms: Employees who are required to wear a specific uniform that cannot be worn outside of work can deduct the costs of that uniform and its cleaning.
  • Union Dues: Dues paid for required union membership for employment are deductible. Other expenses related to required membership are also deductible.
  • Charitable Contributions: The resale value of clothing, personal item or furniture donations to charitable organizations are deductible. Items of high value are prescribed a maximum deductible amount and may need to be appraised before being claimed.

Claiming Your Deduction

This checklist contains the most commonly claimed deductions. Check the IRS website to determine the maximum amount and what you must prove to legally claim any deductions available to you.

Tax Deduction Checklist