The Average IRS Deductions
Filling out tax forms can be as mystifying as a Criss Angel illusion without the entertainment. Before opting for a root canal instead, learning about average deductions the IRS allows as of the 2010 tax season can help demystify the process. Whether tackling the task of filing or hiring a tax expert, knowing what to deduct helps you identify the types of documents to gather to expedite either process. Deductions can ease the pain of income taxes by keeping more money in your pocket.
Health Expenses
Medical and dental expenses incurred in excess of 7.5 percent of your adjusted gross income can be deducted, according to the Internal Revenue Service. Adjusted gross income includes wages, capital gains, income garnered from retirement accounts, interest and alimony paid to you adjusted downward by specific deductions, excluding contributions to deductible retirement accounts or alimony paid by you.
Real Estate Tax
Deductible real estate taxes are generally any state, local or foreign taxes on any real property. The taxes are based on the assessed value of the property. If you pay a portion of your mortgage into an escrow account and periodically the lender pays real estate tax out of the account to the local tax authority, you can deduct the actual amount paid out of escrow for that year.
Personal Property Tax
Deductible personal property taxes are based only on the value of the personal property, such as a boat or car. You may also be able to deduct state and local sales or excise taxes paid after Feb. 16, 2009 for the purchase of any new motor vehicles for the 2010 tax year.
Gifts to Charity
Subtracting contributions to charity from your income requires itemizing the deductions on Form 1040, Schedule A. If your contribution provides you with charity ball, banquet, or sporting or theatrical performance tickets, you can only deduct the fair market value amount over the tickets received.
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