Top Overlooked Tax Deductions
By Julian Block
Don’t pay the IRS more than you need to. Be sure to claim these often overlooked deductions
- Charitable deductions – Did you do volunteer work? Claim itemized deductions on Schedule A of Form 1040 for unreimbursed out-of-pocket expenses such as travel and telephone calls.
- Mortgages – Don’t forget another itemized deduction for your payment for points to buy, build or improve a principal residence.
- Medical expenses – Remember that itemized deductibles include the cost of travel that was necessary to obtain care.
- Gambling losses – Make sure to claim them if you itemize, but only to the extent of gambling winnings.
- State income tax payments – Don’t miss an itemized write-off for payments made during 2001 for 2000 or earlier years.
- Special deductions – Are you over 65 or legally blind? Don’t forget that you get an extra-large standard deduction if you do not itemize.
- Capital loss carryforwards – Review last year’s Schedule D of Form 1040 for carryforwards from 2000 or earlier years.
- Self-employment taxes -- If you paid them, deduct half the payment on page one of the 1040 form.
- Penalty for early withdrawal of savings – If you removed money from an account and were nicked for the penalty, deduct the penalty on the front of the 1040 form.
- Social security taxes – Check for overpayment of Social Security taxes if you worked for more than one employer and your wages exceeded the wage base ceiling for Social Security taxes of $80,400 for 2001.
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