Client Alert Spring 98 - Maximizing Your Tax Benefit Through Itemized Deductions

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Client Alert - Spring 1998

Maximizing Your Tax Benefit Through Itemized Deductions
by: George E. Barrett, CPA

Often itemized deductions are omitted from an individual's income tax return, resulting in an overpayment of tax. Not all allowable items are fully deductible, however. Job related expenses and miscellaneous deductions are limited to amounts in excess of 2% of a taxpayer's adjusted gross income (AGI), medical expenses are limited to amounts in excess of 7.5% of AGI and casualty and theft losses are limited to amounts in excess of 10% of AGI. Also, total itemized deductions are reduced for taxpayers with AGI over $121,200 ($60,600 if married filing separately) in 1997. Itemized deductions which you may not have previously considered include:

Investment expenses, including annual fees for brokerage accounts and custodian fees for IRAs *
Laundry, uniforms and protective clothing suitable only for work, e.g., nurse's uniforms *
Career counseling costs *
Job hunting expenses including travel, resume preparation and postage *
Transportation costs incurred for medical purposes (10¢ per mile in 1997 & 1998) **
Transportation costs (12¢ per mile in 1997 & 14¢ in 1998) incurred in the performance of services for a charitable organization, excluding travel to & from church or choir practice
Unreimbursed employee business deductions including meals & entertainment (50%), transportation costs (31.5¢ per mile in 1997 & 32.5¢ in 1998) and supplies *
Professional dues & subscriptions *
Financial planning fees *
Gambling losses up to the amount of winnings
Foreign taxes unless claimed as a tax credit
Safe deposit box rental *
Points paid on a home mortgage (amortizable over the life of the mortgage for a refinance)

* Limited to aggregate amount in excess of 2% of AGI

** Limited to aggregate amount in excess of 7.5% AGI If you have any questions, please give us a call.

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