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It is possible to reduce your taxes by itemizing your deductions. Even if you have been itemizing for years, there are deductions that you may have overlooked. Some involve additional recordkeeping, but that extra effort can pay off in a big tax savings.

Many people don't keep track of their medical deductions because most of the time they don't have enough medical expenses to deduct. In order to deduct medical expenses, the expenses must exceed 7.5% of the Adjusted Gross Income. This can be quite a high bar. The following list has medical deductions that are frequently omitted, but can help reach and exceed the amount needed to be deductible:

1. Prescriptions
2. Payments to doctors, dentists, acupuncturists, osteopathics, chiropractors, psychologists, etc.
3. Contact lenses and the solutions for them
4. Hearing aids and the necessary batteries
5. Special dietthe costs of the special foods above the costs of the normal diet when prescribed by a doctor
6. Laser eye surgery, including LASIK and radial keratotomy
7. Health insurance premiums (unless they are pre-tax, as in a Section125 plan), including Medicare Parts A & B
8. Swimming. Prescribed therapeutic swimming costs including the costs of maintaining a pool in your back yard
9. Weigh loss program as a treatment for a specific disease. If your doctor diagnoses obesity, it will qualify. Foods for the program do not qualify (except as above special diets)
10. Insulin and diabetic testing supplies, including blood monitor
11. Mileage to and from physician's office, labs, hospitals, clinics, etc. @ 18 cents a mile (2006 tax returns)
12. Smoking cessation programs and prescribed drugs to alleviate nicotine withdrawal

In the area of deductible taxes, all real estate taxes are deductible. The most frequently omitted tax is personal property tax (also called DMV or MVD) fees based on the value of your property.

Mortgage interest used to be simple. You had a mortgage and you deducted the interest. It is now quite a bit more complicated. You can deduct the interest on up to two homes (and you can choose each year which two to deduct). Indebtedness is limited, however, to $1,000,000 of deductible mortgage interest. You can have an additional $100,000 of home equity indebtedness. Both of these categories, home mortgage interest and home equity interest, are subject to other limitations and should be discussed with a knowledgeable tax professional before jumping to sign on the dotted line for the loans.

In addition, points paid on loan

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