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Charitable Donations

Donations to a qualified charitable organization are deductible (qualified organizations should be able to give you proof of status). Make sure that you can supply all necessary receipts or acknowledgement letters to the IRS. If you receive any goods or services in exchange, subtract the value of the goods and services from the contribution amount.

Medical and Dental Expenses

You can deduct unreimbursed medical and dental expenses that total more than 10% of your Adjusted Gross Income (AGI). If you were born before January 2, 1951, you can deduct expenses beyond 7.5% of AGI – but the 2016 tax year is the last year for the 7.5% exception.

Performing Artist Expenses

Are you the stereotypical starving artist? Certain business expenses of performing artists, as well as reservists and fee-basis government officials, are handled separately from other deductible business expenses.

Tax Preparation Fees

Generally, you can deduct fees that you pay for tax preparation in that year. This means that on your 2016 return, you can deduct the fees incurred in 2016 for preparing your 2015 return.

Mortgage Interest and Points

The mortgage interest that you pay on your home, as well as a portion of the points you paid to reduce your interest rate, may be deductible if you meet the criteria listed in IRS Publication 936, "Home Interest Mortgage Deduction."

Mortgage Insurance Premiums

Mortgage insurance premiums also qualify under the mortgage interest deduction, but they are subject to phase-out beginning at $100,000 AGI (for married filing jointly status).

Gambling Losses

Was it a bad year for you at the racetrack but a good year with lottery tickets? Believe it or not, you can deduct gambling losses with sufficient documentation – but only to the extent that you offset other gambling winnings.

Real Estate and Personal Property Taxes

Deadline for filing state income tax returns (for most states) and extension requests. Last day to make a contribution to a Traditional or Roth IRA, Health Savings Account (HSA), SEP-IRA or 401(k)

State/Local Taxes

You can deduct your state and local taxes paid in the previous year, or you can deduct the sales taxes that you paid (preferable for states that levy no state income tax). If you choose to deduct sales taxes, consult the 2016 Schedule A instructions to get a baseline value and then add the tax on big-ticket items that were purchased during 2016.

Job Hunting Expenses

If you are looking for a new job within your present occupation and meet other criteria in IRS Publication 529, "Miscellaneous Deductions," you may deduct certain job-hunting expenses.

Moving Expenses

If you succeeded in the above job hunt and must move because your new job is at least fifty more miles away from your current home, you can deduct some moving expenses. See Publication 521, "Moving Expenses," for details.

Retirement Plan Contributions

Contributions to tax-deferred retirement accounts may be deductible. Roth IRAs are not since they are funded with post-tax dollars.

Alimony

Amounts that you pay to a former spouse, excluding child support payments, may be deductible. See Tax Topic 452 for details.

Health Savings Account Deductions

Your 2016 contributions to your Health Savings Account (HSA) are deductible, although employer contributions are not.

Self-Employment Expenses

As a self-employed person, you pay both the employer and employee component of payroll taxes. Fortunately, you get to deduct the 50% considered the employer portion. In some cases, you can also deduct retirement fund and health insurance expenses.

Educational Deductions

You may be able to claim deductions on tuition, fees, and student loan interest paid – but first see if you qualify for educational tax credits such as the American Opportunity Tax Credit (AOTC). Tax credits subtract directly and fully from your tax bill, compared to deductions that reduce your tax bill proportionally to your tax rate.
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