What is a schedule A? What are itemized deductions? Can I write off my medical expenses? These are common questions asked of a Denver tax attorney by clients at The McGuire Law Firm. The article below has been drafted by a tax attorney at The McGuire Law Firm to assist with some of the questions above.
A Schedule A is the schedule in which a taxpayer states their itemized deductions. A taxpayer will either take the standard deduction or itemize their deductions. A taxpayer will itemize their deductions if their itemized deductions are greater than the standard deduction. Thus, Schedule A can be used to calculate itemized deductions and is the schedule in which a taxpayer will use to report their itemized deductions on their 1040 Individual Income tax return.
Below is a list of deductions that can be taken on a Schedule A:
– Medical expenses (the medical expenses that can be itemized are those that are greater than 7.5% of the taxpayers adjusted gross income, or 10% if the taxpayer is a certain age)
– Taxes: State income taxes or general sales tax, real estate taxes, personal property taxes and other taxes can be deducted as itemized deductions on Schedule A
– Mortgage interest: You should receive a Form 1098 stating your mortgage interest, or you can report mortgage interest paid that is not reported on a Form 1098, but you will need to provide additional information
– Mortgage insurance premiums
– Gift to charity- these can be gifts by cash or check, or property that was donated to charity. Certain reporting requirements apply when the gifts claimed are above $500 and this figure can change
– Casualty and theft losses
– Unreimbursed employee expenses
– Tax return preparation fees
– Other expenses
In general, your itemized deductions will lower your taxable income and thus the amount of tax you pay for the year. Your itemized deductions can be phased out depending upon your adjusted gross income meaning that your itemized deductions are reduced (thus the benefits lessened) when you make a certain amount of money.
Your Schedule A is attached and included with your 1040 Individual Income Tax Return that is filed with the Internal Revenue Service. In addition to lowering your federal income taxes, if your state income taxes are calculated based off of your federal taxable income, these itemized deductions can also reduce your state income taxes.
You can speak with a Denver tax attorney by contacting The McGuire Law Firm and scheduling a free consultation or email Mr. McGuire at John@jmtaxlaw.com