by Yolanda Jones

Created on: November 26, 2008

There are many ways to reduce your tax liability, one way is itemizing your deductions. A lot of people say well I have been doing that for years and it has not helped yet. I am going to tell you some of the things that you can take as a deduction. Some people say that they use all that they have. But there are some that are always overlooked. So lets take a look at some of these deductions.

Medical Deductions: Medical expenses are amounts paid for medical, dental, and vision care. This includes premiums paid for insurance to cover the expenses of medical care, transportation to obtain medical care, and meals and lodging provided by a hospital during medical treatment. The taxpayer can also deduct the cost of using their vehicle for medical reasons. Expenses paid for nursing home and nursing services, and lifetime care advance payments, may be deductible as medical expenses. These expenses, like other medical expenses, are subject to the 7.5% of AGI limit.
Charitable Expenses: Contributions to a qualified charitable organization are deductible in the year the taxpayer actually makes them. The deductions for charitable contributions may be limited to 20%, 30%, or 50% of AGI (Adjusted Gross Income). Depending on what is donated and the type of organization in which the donation is made.
Employee Business Expenses: Employees may be able to deduct unreimbursed ordinary and necessary business-related expenses that they paid during the year. A person must meet certain test to deduct expenses related to the business use of their home. As and employee, this use must be for the convenience of the employer. If a person leases a car used in business for a term of 30 days or more, they may have to reduce their business deduction by an inclusion amount for each uear the car is leased and used for business. Generally, the person can deduct 50% of their unreimbursed meal expenses for employee business travel, whether they calculate the expense using actual cost. If the person receives an advance, allowance, or reimbursement for their expenses. How they report this amount and their expenses depends on whether the reimbursement was paid to them under an accountable plan or a non accountable plan. An employer may reimburse the actual cost of employee business expenses, or they may use a per diem allowance for certain expenses.
Investments and Interest Deductions: The interst paid for money borrowed to buy property held for investments. Investment interest is deductible as long as the interest is not incurred to produce tax exempt income and does not exceed the taxpayers net investments.
These are only a few of the deductions that you can take on your taxes.

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