How to Tax Deduct Your Life

Step-by-Step Guide

1. 1

   Step 1: Remember that everyone is eligible for the standard deduction.

   Everyone must choose to itemize their deductions (which tally up the expenses you actually incurred)or take the standard deduction, which everyone can take regardless of whether you actually incurred any deductible expenses.
   
   For 2012 the standard deduction for single people is $5,950 and $11,900 for married couples.
   
   If all of your individual deductions
   - known as itemized deductions
   - do not add up to more than this number, you should take the standard deduction.
2. 2

   Step 2: Determine your home-related deductions.

   These include Casualty losses
   - you can deduct the amount of damage caused to your property as the result of a storm, fire, flood, etc.
   
   Moving expenses
   - you can deduct the cost of packing and shipping your possessions as well as travel and lodging when you move a certain distance for business.
   
   Home mortgage interest deduction
   - you can deduct the interest you paid on a mortgage for your primary residence. , Office supplies
   - you can deduct the expense of business-related office supplies regardless of whether you take the home office deduction Office furniture
   - you can deduct the cost of office furniture Other equipment
   - you can also deduct computers, tablets, smartphones, copiers, fax machines, scanners, etc. as long as you use them for business.
   
   Telephone charges
   - you can deduct the cost of business calls you make from home.
   
   Business party
   - you can deduct the cost of a business party, as long as it's directly related to your business.
   
   Business travel
   - you won't be able to deduct your commute to work, but you can deduct business-related travel that you do away from home. ,, Medical expenses
   - you can deduct the cost of medical expenses when they exceed
   7.5% of your AGI. ,, They include State income tax
   - you can deduct what you have to spend on state and local income taxes.
   
   State sales tax
   - if you don't deduct state income taxes, you can deduct sales tax instead. , These include Volunteer expenses
   - you can deduct the expenses you incurred when you volunteered for a charity to aid victims of a disaster.
   
   Charitable donations
   - you can deduct the amount that you donate to charitable organizations recognized by the IRS. , The final step is figuring out if all of your itemized deductions together add up to more than the standard deduction amount.
   
   If they don't, you should claim the standard deduction as it will save you more money. , You can find the Schedule A here
   - http://www.irs.gov/pub/irs-pdf/f1040sa.pdf
3. 3

   Step 3: Determine your work-related deductions Home office - you can deduct expenses related to that portion of your home that you use for conducting your business.

4. 4

   Step 4: Determine your education-related deductions Student loan interest - low to middle-income college graduates can deduct some of the interest they paid on student loans Tuition and fees - you can deduct up to $4

5. 5

   Step 5: 000 of qualified education expenses.

6. 6

   Step 6: Determine your medical-related deductions Self-employed health insurance - you can deduct what you paid for medical insurance if you are self-employed.

7. 7

   Step 7: Determine your retirement-related deductions IRA contributions - you can deduct contributions to a traditional or Roth IRA.

8. 8

   Step 8: Determine your state and local-related deductions.

9. 9

   Step 9: Determine your other deductions.

10. 10

    Step 10: Determine if your itemized deductions are greater than the standard deduction.

11. 11

    Step 11: When you complete your return

12. 12

    Step 12: be sure to include a Schedule A as well as any other relevant forms.

Detailed Guide

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