- The federal government allows a tax deduction for fees paid to medical practitioners like doctors, dentists, chiropractors and psychiatrists. You can also deduct the cost of medical insurance and long-term care insurance, as well as transportation costs for medical care. Prescription drugs are also deductible, along with acupuncture treatments and inpatient alcohol and drug addiction treatment. You can file a tax deduction for prescription glasses, false teeth, hearing aids and the cost of equipment like wheelchairs and crutches. However, you may not deduct funeral expenses, cosmetic surgery and the cost of over-the-counter medication.
- In the area of taxes, the federal government allows five types of non-business tax deductions. You can deduct state, local and foreign income taxes, and state, local and foreign real estate taxes. State and local personal property tax, and state and local sales tax are also deductible. Qualified motor vehicle taxes are tax-deductible.
- Another major expense that qualifies as a tax deduction is the mortgage interest on your home. The home can be a cooperative apartment, condominium, house or mobile home with cooking, sleeping and toilet facilities. A second home may also qualify for a tax deduction on mortgage interest payments. If you rent the second home, you must use it for 14 days or 10 percent of the number of days you rent it out in order for it to qualify for a tax deduction.
- Qualifying charitable contributions must be made to a qualified organization, not an individual. When the contribution entitles you to a ticket to a performance or sports event or provides you with goods or services, you must deduct the amount that is in excess of the market value of the benefit you received. Cash gifts must be recorded with the name of the organization, the date and the amount of the contribution. For contributions of $250 or more, you must obtain a written acknowledgement from the organization.
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