How to Prepare Tax Schedule A
Doing your taxes can be a confusing matter. Some of the additional forms beyond the traditional 1040 is enough to send you racing to the nearest tax preparer. Schedule A deals with your deductions. Its mystery can be unraveled if you simply take the time to follow the steps below.
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Instructions
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Divide all the expenses that you had in the previous year into several piles. Medical expenses, taxes you paid, interest you paid, gifts to charity, casualty and theft losses, job expenses and certain miscellaneous deductions.
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Find out if you meet the minimum requirement to deduct. Theft and casualty loss has to be at least 10 percent of your adjusted gross income. The medical expense area has you subtract 7.5 percent and job related expense have you subtract 2 percent of your adjusted gross income. If the amount in that pile is not more than those deductions, then the entire pile is eliminated.
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Realize you can deduct the state and local income tax that you paid the year before. Property and personal property tax are also considered in the area of "taxes you paid." Read the IRS publication carefully to see if there's something more that is deductible for you in this area.
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Consider your mortgage while filling out the interest area. Some additional things that people forget to deduct in this area are points paid, and interest on an investment property.
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Include all of your applicable charitable giving as deductions are tax benefits. You don't need a receipt if the amount is under $250. You can use carryover from previous years here since there's a limit of 30 percent of annual income that can be donated each year. The rest is carried over to the next years. Include the used items that you gave to organizations. You also can deduct some of the money spent on Girl Scout cookies or similar purchases; any amount over the actual value of the item is deductible.
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Check for additional job-related expenses. Dues, moving expense, employment agencies, tools, uniforms, job related magazine subscriptions and educational expenses are all deductible. A conference in Hawaii is deductible for you, but not for a spouse that isn't in your business.
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Finalize schedule A by calculating what you had in the miscellaneous category. Gambling losses up to the amount of winnings, clerical and professional service, and basically anything that helped you make money but cost you is deductible, as are expenses for impairment-related work expenses for the disabled worker. Check your tax instruction book for more. If your adjusted gross income isn't over $150,500, then add all the balances together and put the number at the bottom.
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Tips & Warnings
Health insurance that you pay for is considered a medical expense.
