April 15, the deadline for filing federal taxes, will be here before you know it. Get ready now by understanding basic deductions you can take.
Standard Deduction
Whether you file as a single or married person, you receive a standard deduction on your taxes. The basic standard deduction in 2015 is:
- Single and married filing separately: $6,300
- Married couples filing jointly: $12,600
- Head of household": $9,250
Taxpayers who are over 65 years of age, fully or partially blind, or both receive a larger standard deduction. There are also exceptions to the standard deduction. It won't apply if:
- You itemize deductions
- You're married but file separately and your spouse itemizes deductions
- You, or your spouse if you file a joint return, is a non-resident alien for any portion of the tax year
- You file a return that covers fewer than 12 month
Student Loan Interest
In addition to your standard deduction, you can deduct the student loan interest you, your spouse if filing jointly or your dependents paid. The maximum deduction is $2,500, but your income can affect this amount.
Mortgage Interest
Deduct the mortgage interest you pay on your home if you meet three guidelines. You must itemize deductions, make payments on a qualifying home and be legally liable for the mortgage.
Property Taxes
Pay property taxes on a property you own, and you can deduct those payments. This deduction applies even if your taxes are paid via an escrow account.
Medical Expenses
If your qualifying medical expenses exceed 10 percent of your adjusted gross income, you can deduct them. They must be related to a medical diagnosis, cure, treatment or disease prevention and can include medications, health and dental insurance, medical devices and equipment, long-term care and transportation costs. Be sure to save detailed records if you plan to take this deduction.
Charitable Donations
Donations you make to charity can be itemized and deducted on your tax return. You must donate to a qualified organizations and not an individual. Remember to assign a fair market value to items you donate and obtain a written receipt from the organization.
Unreimbursed Job Expenses
Sometimes, you may drive your vehicle to meet clients, pay for your hotel when traveling for work or buy business cards. Ordinary and necessary job-related expenses are deductible if your employer does not reimburse you for those expenses.
These are just a few examples of deductions you can take when you file your taxes. Your accountant can provide additional details. Discuss any special considerations with your Human Resources office, too, as you prepare your tax return this year.