Itemized Deductions

Question 1

Itemized deductions consist primarily of

Answer 1

Non-trade business expenses (employee and investment expenses) and a few personal expenses that can be deducted.

Question 2

Six types of personal expenses may be itemized

Answer 2

Medical expenses
Interest
Taxes
Charitable contributions
Casualty losses
Miscellaneous deductions

Question 3

What type of medical expenses are deductible

Answer 3

Any expenditure for the care, prevention, cure, or treatment of disease or bodily function. It is deductible for the taxpayer, spouse, and dependent

Question 4

Qualified medical expense computation

Answer 4

Qualified medical expenses - insurance reimbursements - 10% of AGI

Question 5

What kind of taxes are deductible

Answer 5

Property taxes and income taxes imposed by state, local, or foreign governments. For cash basis taxpayers, the taxes are deductible in the year paid or withheld

Question 6

What types of property taxes are deductible

Answer 6

1) Property used for business purposes 2) Personal property taxes based on the value of the property (ad valorem)

Question 7

What types of property taxes are not deductible

Answer 7

1) Special assessments 2) Fees and licenses

Question 8

What type of home mortgage interest can be deducted

Answer 8

Interest paid on debt secured by a personal residence. Includes first and second home

Question 9

What’s the maximum acquisition indebtedness that can be deducted

Answer 9

$1 million

Question 10

What is investment interest expense limited to for a deduction

Answer 10

Net investment income (investment income less investment expenses)