by Sandy Barrett

Created on: August 23, 2007   Last Updated: June 30, 2010

Who Should Itemize?

You are allowed to choose which will benefit you more, itemizing your deductions or taking the standard deduction. If your itemized deductions do not add up to more than the standard deduction, you will want to take the standard deduction.

The standard deduction amounts for 2006 tax returns are as follows:
Single $5,150
Married Filing Joint/Qualifying Widow(er) $10,300

Head of Household $7,550
Married Filing Separately $5,150
65 & over or blind each (MFJ, QW, MFS) $1,000
65 & over or blind (Single, HOH) $1,250

The following are among the more common itemized deductions. If the total is more than the standard deduction, you will want to itemize. (Your tax preparer can give you other items or details to maximize your deductions.)

1. Medical deductions subject to the 7.5% floor (meaning you "lose the first 7.5% over your adjusted gross income) for the federal return.
a. Prescriptions
b. Payments to Doctors, dentists, acupuncturists, osteopathics, chiropractors, psychologists, etc.
c. Some expenses you may not have known about:
i. Contact lenses and the solutions for them
ii. Hearing aids and the necessary batteries
iii. Special diet the costs of the special food above the costs of the normal diet when prescribed by a doctor
iv. Laser eye surgery, including LASIK and radial keratotomy
v. Insurance premiums, including Medicare Part A & B
vi. Medical conferences related to the chronic illness of the taxpayer, spouse, or dependent (Cannot deduct meals & lodging).
vii. Swimming. Prescribed therapeutic swimming costs including the cost of maintaining a pool at the taxpayer's residence
viii. Weight loss program as a treatment for a specific disease. If the physician diagnoses obesity, it will qualify. Foods for the program to not qualify (see above special diet)
ix. Insulin and diabetic testing supplies, including blood monitor
x. Mileage to and from physician's office, labs, hospitals, clinics, etc. @ 18 cents per mile
xi. Smoking cessation programs and prescribed drugs to alleviate nicotine withdrawal.

2. State Income Tax or State/County/City Sales Tax

3. Real Estate Taxes.

Although mortgage interest is limited to two properties, all real estate taxes are deductible.

4. Personal Property Taxes (Also known as DMV or MVD fees)
a. Must be based on the value of the vehicle
b. Must be personal property
c. Must be charged on an annual basis

5. Mortgage Interest
a. Can deduct mortgage interest on up to two homes
b. Indebtedness is limited to $1,000,000 of deductible

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