The Top Five Tax Deductions

The top five tax deductions include home mortgage interest, charitable donations, income taxes paid, real estate taxes paid, and medical and dental expenses. These are itemized deductions that can be taken on tax forms.

Home Mortgage Interest

You can usually deduct the interest you pay on a loan secured by your home, if it includes a mortgage, second mortgage, home equity loan, or a line of credit. You must own the home in order to deduct this interest, and you must pay more than $600 in interest.

Charitable Donations

If you donate to qualified organizations you may be able to deduct the fair market value of the items. The deduction is typically only able to reach 50 percent of your adjusted gross income, but can be as low as 20 to 30 percent, depending on your specific limits.

Income Taxes Paid

Local income tax, as well as state, may be able to be an itemized deduction. The catch is that if the income was not taxed federally, it is not able to be deducted. You can’t deduct employment taxes, social security, or other similar taxes.

Real Estate Taxes

If your property has been assessed and is being taxed accordingly, you may be able to claim a deduction for the real estate. In most cases, you’ll receive a 1098 form with the important information if the taxes were taken with your mortgage payment.

Medical and Dental Cost

Medical and dental expenses can add up over the year, and are one great way to gain a deduction. Expenses for diagnosis, treatment, prevention of a disease, mitigation, or cure can all be deducted on your taxes. In most cases, this will include the cost of seeing the doctors, including surgeons, dentists, physicians, and others. Medical equipment and supplies prescribed by a doctor are also deductible.

More about Medical Expenses

Getting to and from your appointment can also be deducted. This is often a cost that is overlooked. Health care insurance premiums may be deducted, and includes what you pay for yourself and family members.