Itemized deductions can be quite helpful when it comes to
saving money come tax time. However, these deductions can also be a bit tricky,
and if you don’t handle them correctly, you could find yourself in hot water or
even getting audited. To help you avoid any problems with the IRS and to still
enjoy your itemized deductions, follow a few simple tips.
Remember, Nothing Stays the Same
To begin with, understand that nothing about itemized
deductions stays the same. Just because you received a particular deduction
last year is no guarantee that you’ll get it again this year.
The IRS has been known to change the rules on who can get
certain deductions or even to get rid of deductions entirely. So, never file
for any deduction, even if you’ve enjoyed it in the past, without
double-checking the current year’s tax rules, or, even better yet, having your
accountant do it for you.
Retain Proof of Charitable Donations
One of the most commonly utilized itemized deductions is the
one set aside for those who donate to charity. Whether you’re donating goods or
money, however, keep in mind that you’ll need to get and hang onto some kind of
proof of your donation.
This could be a canceled check, a receipt, a bank record, or some other kind of proof. Without proof, though, you cannot rightfully claim your deduction, and you could get in trouble if the IRS checks up on your claims.
Be Smart About Medical Expenses
A lot of people don’t realize that they can deduct certain
medical expenses, and, if you’re one of those people, then you’re missing out!
Don’t cheat yourself out of available deductions, such as deducting premiums
for Medicare Part D prescription drug insurance or other premiums.
Keep in mind, too, that you can deduct mileage related
expenses for travel you did for medical reasons. There are also other,
surprising medical expenses you can deduct, up to a certain amount; you can
learn about many of these by reading the IRS Publication 502, termed “Medical
and Dental Expenses.
In truth, though, knowing what medical expenses you can
deduct and how much you can deduct can be tricky, so it’s always in your best
interest to get a professional accountant to help you handle and file your
deductions. In fact, that brings us to our next and most important tip.
Work with a Pro!
No matter how much reading and researching you do, the fact
remains that tax laws, even and perhaps especially those laws that relate to
tax deductions, are tricky. And, if you do something wrong, even on accident,
it’s all too easy to look like you’re trying to cheat the system.
Don’t land yourself in this kind of hot water or, on the
flip side, miss out on perfectly legitimate deductions. Get a tax professional
to help you so that you never lose out on or make a mistake on another
deduction again!
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