TO DEDUCT OR NOT TO DEDUCT?

The one thing constant about the IRS is that nothing is constant. Each year tax laws change, creating havoc with people who file their own taxes. You have a choice of standard or itemized deductions, whichever is more conducive to your particular situation.

Even if you have a tax professional prepare your taxes, knowledge of the current law will help you prepare your documents. A glance at the 2002 itemized deductions allowed may help:

Non-reimbursed Medical/Dental:

• To the extent you were not reimbursed, you may deduct insurance premiums for medical/dental care and qualified long-term care contracts as defined in Pub. 502

• Prescription medicines or insulin

• Payments to acupuncturists, chiropractors, dentists, eye doctors, medical doctors, occupational therapists, osteopathic doctors, physical therapists, podiatrists, psychoanalysts (medical care only) and psychologists

• Medical examinations, X-ray and lab services, insulin treatment and whirlpool baths ordered by a doctor

• Nursing help (including your share of the employment taxes paid)

• Hospital care (including meals and lodging), clinic costs and lab fees

• Qualified long-term care services

• The supplemental part of Medicare insurance

• Programs to stop smoking and for prescription medicines to alleviate nicotine withdrawal

• Medical treatment at a center for drug or alcohol addiction

• Medical aids like eyeglasses, contact lenses, hearing aids, braces, crutches, wheelchairs and guide dogs, including the cost of maintaining them

• Surgery to improve vision including radial keratotomy or other laser eye surgery

• Lodging expenses (excluding meals) – $50 per day per person, (but not meals) while away from home to receive medical care in a hospital or medical care facility related to a hospital, provided there was no significant element of personal pleasure, recreation or vacation in the travel

• Ambulance service and other travel costs to get medical care. including costs incurred using your own car – amount spent for gas and oil to go to and from the place you received the care; or you may claim 12 cents a mile plus parking and toll fees. This list was taken directly from the IRS Instructions for Schedules to Form 1040.

Some additional itemized deductions are:

• Business-related finance charges and interest on Schedule C

• Interest and finance charges on business credit cards and loans

• Interest on first and second home

• Taxes paid, including state income, property, motor vehicle and state disability taxes

• Part or all of charitable contributions

• Investment expenses, income tax preparation fees, work-related expenses and some education expenses are also deductible

Confused? Enlightened? Please call the office for more information on itemized deductions. You may have expenses you can deduct and are not aware of it!

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