What Tax Deductions Can You Claim on Your Income Tax Return?

Taxpayers can take advantage of a variety of deductions and credits on their taxes each year that can help them pay a lower amount of taxes or receive a refund from the IRS. Detailed deductions, such as standard deduction and itemized deductions, non-commercial deductible taxes, personal property tax, real estate tax, sales tax, charitable contributions, gambling losses, and miscellaneous expenses are all allowed for income tax. Types of itemized deductions include mortgage interest, state or local income taxes, property taxes, medical or dental expenses that exceed AGI limits, or charitable donations. Property taxes may be deductible if itemized, but a limit comes into play.

The limit is scheduled to last until tax year 2025, unless Congress extends it. You can deduct mortgage insurance premiums, mortgage interest, and real estate taxes you pay during the year on your home. You can generally deduct charitable contributions in cash totaling up to 60% of your adjusted gross income (AGI). Donations of items or property are also considered deductible charitable contributions. Medical and dental expenses qualify for a tax deduction, although you can only deduct costs that exceed 7.5% of your AGI.

The amount of your credit depends on your income. If you're self-employed, you can deduct 100% of the health insurance premiums you pay monthly for yourself, your spouse, and your dependents, regardless of whether or not you detail the deductions. Detailed deductions for New York State are reported on Form IT-196, itemized deductions for New York residents, non-residents and half-year residents. For certain detailed New York deduction calculations, the instructions on Form IT-196 can refer you to this website for additional information or instructions.

For federal purposes, you can no longer request an itemized deduction for an accident or theft loss, unless it is the result of a federally declared disaster. For New York purposes (Form IT-196, line 20), you can claim losses for accidents and thefts. However, in the case of an accident loss that results from certain federally declared disasters (Form IT-196, line 3), see Miscellaneous Other Deductions below. Your tax preparer should also be able to allow you to determine if you should itemize or take the standard deduction. Virginia's deduction for long-term health insurance premiums is not allowed at all if you requested a federal income tax deduction of any amount for long-term health insurance premiums paid during the tax year. Non-business taxes can only be claimed as an itemized deduction in Schedule A (Form 1040), Detailed Deductions. In the year of the provision, the adjustment will be a subtraction of the profit attributable to installment payments that will be made in future tax years, provided that (i) the profit comes from an installment sale for which federal law does not allow the grantee to choose the installment income return, and (ii) the grantor chooses the installment treatment of income for Virginia purposes on or before the due date prescribed by law to file the taxpayer's income tax return. A licensed elementary or secondary school teacher may introduce a deduction equal to 20% of the unreimbursed tuition costs incurred to attend continuing education courses that are required as a condition of employment, provided that these expenses have not been deducted from federal adjusted gross income.

However, any refund received by the state taxpayer the previous year must be counted as income if the taxpayer itemized deductions from the previous year. Allows a deduction of taxable income for payments received the previous year in accordance with the Tobacco Quota Purchase Program of the United States Job Creation Act of 2004, to the extent that they are included in federally adjusted gross income. Allows you to deduct unreimbursed expenses paid by a living organ and tissue donor that have not been taken as a medical deduction on the taxpayer's federal income tax return. If a taxpayer incurs an accidental loss in one year and deducts it from their taxes, any refund they receive in subsequent years should be counted as income. Some taxes and fees that you cannot deduct in Schedule A include federal income taxes, social security taxes, transfer taxes (or stamp taxes) on the sale of properties, homeowners association fees, inheritance and inheritance taxes, and water service charges , sewerage or garbage collection. You may be able to cancel out some common deductions such as tax credits and deductions: If you weren't allowed to deduct business interest on your federal income tax return because of section 163 (j) of the Internal Revenue Code, you may be able to subtract 20% of it on your Virginia income tax return. Contributions you make to a retirement plan such as a 401 (k) or a traditional or Roth IRA give you a 50%, 20%, or 10% tax credit depending on your adjusted gross income reported on Form 1040.