Top Overlooked Tax Deductions
By Julian Block
Don’t pay the IRS more than you need to. Be sure to claim these often overlooked deductions
- Charitable deductions Did you do volunteer work? Claim itemized deductions on Schedule A of Form 1040 for unreimbursed out-of-pocket expenses such as travel and telephone calls.
- Mortgages Don’t forget another itemized deduction for your payment for points to buy, build or improve a principal residence.
- Medical expenses Remember that itemized deductibles include the cost of travel that was necessary to obtain care.
- Gambling losses Make sure to claim them if you itemize, but only to the extent of gambling winnings.
- State income tax payments Don’t miss an itemized write-off for payments made during 2001 for 2000 or earlier years.
- Special deductions Are you over 65 or legally blind? Don’t forget that you get an extra-large standard deduction if you do not itemize.
- Capital loss carryforwards Review last year’s Schedule D of Form 1040 for carryforwards from 2000 or earlier years.
- Self-employment taxes -- If you paid them, deduct half the payment on page one of the 1040 form.
- Penalty for early withdrawal of savings If you removed money from an account and were nicked for the penalty, deduct the penalty on the front of the 1040 form.
- Social security taxes Check for overpayment of Social Security taxes if you worked for more than one employer and your wages exceeded the wage base ceiling for Social Security taxes of $80,400 for 2001.