FAQs for itemized deductions, standard deductions for U.S. tax filings

FAQs for itemized deductions, standard deductions for U.S. tax filings

If I must deduct points over the life of my mortgage, and I have a 30-year mortgage, should I divide the points paid by 30 and enter that amount on Schedule A?
 
Answer:
No. While you must deduct the points over the life of the loan ratably (equally), you don't divide the points by 30 years. Instead, you divide the points by the number of payments scheduled over the term of the loan (360 monthly payments in the case of a 30-year mortgage) and deduct points each year according to the number of payments you made in that year (less than twelve payments in some cases).

If the loan ends prematurely, for example, because you paid it off or refinanced with a different lender, then the remaining points are deductible in that year.
Note: this does not apply to loans refinanced with the same lender.
Any deductible points not included on Form 1098 (usually not included on the Form when refinancing) should be entered on Schedule A (Form 1040), Itemized Deductions, line 8c "Points not reported to you on Form 1098."
Additional Information:
Can I Deduct My Mortgage-Related Expenses?
About Publication 936, Home Mortgage Interest Deduction
Instructions for Schedule A (Form 1040) (PDF)
Tax Topic 504 - Home Mortgage Points
Subcategory:
Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses)
Category:
Itemized Deductions, Standard Deduction
Last year, my parents and I both took out student loans to pay for my education. We both received Form 1098-E for our separate loans. I wasn't their dependent last year. Can we both claim student loan interest on our tax returns?
 
Answer:
No. Your parents cannot claim the deduction for student loan interest on their tax return because you were not their dependent at the time they took out a student loan for you. However, you can claim, subject to certain limitations, the deduction with respect to the loan that you took out for yourself (assuming that you meet the other requirements for this deduction).
 

Additional Information:
Tax Topic 456 - Student Loan Interest Deduction
Tax Topic 505 - Interest Expense
Can I Claim a Deduction for Student Loan Interest?
Publication 970 - Tax Benefits for Education
Subcategory:
Education & Work-Related Expenses
Category:
Itemized Deductions, Standard Deduction
My spouse and I are filing separate returns. How do we split our itemized deductions?
 
Answer:
If you and your spouse file separate returns and one of you itemizes deductions, the other spouse must also itemize, because in this case, the standard deduction amount is zero for the non-itemizing spouse.

You may be able to claim itemized deductions on a separate return for certain expenses that you paid separately or jointly with your spouse.
When paid from separate funds, expenses are deductible only by the spouse who pays them.
For example, if otherwise deductible medical expenses are paid from an account owned by one of the spouses or in a community property state from an account that's the separate property of one of the spouses under the laws of that state, only that spouse may claim a deduction for the expenditure.
When expenses are paid from funds owned by both spouses, such as from a joint checking account or accounts considered community property under the laws of the state in which the spouses reside, you should generally split the deduction between you and your spouse.
For example, if amounts are paid from a joint checking account for interest on a residence both you and your spouse own, you would each deduct half of the mortgage interest paid on your separate returns.
However, if only one of you is eligible for a deduction for an expense (for example, real estate taxes on a property owned only by the eligible spouse), only the spouse who is eligible for the deduction is allowed to claim it, even if the expense is paid from joint funds. Each spouse must maintain records documenting who is considered to have paid the expense.
Additional Information:
Publication 530, Tax Information for Homeowners
Publication 936, Home Mortgage Interest Deduction
Tax Topic 501 - Should I Itemize?
Publication 555, Community Property
Publication 504, Divorced or Separated Individuals
Subcategory:
Other Deduction Questions
Category:
Itemized Deductions, Standard Deduction
My university required incoming freshmen to come to school with their own computer. Am I allowed a deduction for the cost of the computer in computing my tax liability if I pay for the computer in the year that I enroll?
 
Answer:
The cost of a personal computer is generally a personal expense that's not deductible. However, you may be able to claim an American opportunity tax credit for the amount paid to buy a computer if you need a computer to attend your university.  For more information, refer to Publication 970, Tax Benefits for Education and Qualified Education Expenses.
 

Additional Information:
Am I Eligible to Claim an Education Credit?
Subcategory:
Autos, Computers, Electronic Devices
Category:
Itemized Deductions, Standard Deduction
Is interest paid on a home equity loan or a home equity line of credit (HELOC) deductible?
 
Answer:
It depends.

For tax years 2018 through 2025, if home equity loans or lines of credit secured by your main home or second home are used to buy, build, or substantially improve the residence, interest you pay on the borrowed funds is classified as home acquisition debt and may be deductible, subject to certain dollar limitations. However, interest on the same debt used to pay personal living expenses, such as credit card debts, is not deductible.

For tax years before 2018 and after 2025, for home equity loans or lines of credit secured by your main home or second home, interest you pay on the borrowed funds may be deductible, subject to certain dollar limitations, regardless of how you use the loan proceeds. For example, if you use a home equity loan or a line of credit to pay personal living expenses, such as credit card debts, you may be able to deduct the interest paid.

Additional Information:
Tax Topic 505 - Interest Expense
Publication 936, Home Mortgage Interest Deduction
Can I Deduct My Mortgage-Related Expenses?
Subcategory:
Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses)
Category:
Itemized Deductions, Standard Deduction
My housemate and I, both the legal owners of our house, pay mortgage expenses from our joint account. The monthly expense also covers the real estate taxes on our home. The Form 1098 and property tax statement only have my name and social security number. How do we split these payments of interest and taxes on Schedule A so we can both claim our share on our separate tax returns?
 
Answer:
To deduct taxes or interest on Schedule A (Form 1040), Itemized Deductions, you generally must be legally obligated to pay the expense and must have paid the expense during the year. Even though two unmarried individuals can both be the legal owners of the home and pay the mortgage equally or from common funds, the lender normally sends out only one Form 1098, Mortgage Interest Statement. Additionally, the local taxing authority may also only provide a receipt in one taxpayer's name.

If you’re each eligible to deduct the expense, you can both take a deduction for your portion of the expenses. Determine the proportionate share of the deductions based upon all facts and circumstances.

With respect to mortgage interest, apply the home acquisition debt limit and the home equity debt limit to the qualified residence or residences to determine if all of the mortgage interest can be deducted. If you're unmarried and pay mortgage interest on the qualified residence, the limit on home acquisition debt and home equity debt is applied per taxpayer. See Publication 936, Home Mortgage Interest Deduction for the debt limit amounts.

If each taxpayer paid one-half of the mortgage and real estate tax expenses, then each Schedule A should reflect one-half as deductions. Both of you should attach a statement to your Schedules A explaining how you're dividing the mortgage interest and payments of real estate taxes. Your housemate, who didn't receive the Form 1098, must list the mortgage interest he or she paid on Schedule A line 8b, "Home mortgage interest not reported to you on Form 1098."

Please keep your records on your split of the deductions for the mandatory review period (statute of limitations) since the information reported won't match the records submitted to the IRS.

Additional Information:
Publication 530, Tax Information for Homeowners
Instructions for Schedule A (Form 1040)
Tax Topic 503 - Deductible Taxes
Tax Topic 505 - Interest Expense
Can I Deduct My Mortgage-Related Expenses?
Subcategory:
Other Deduction Questions
Category:
Itemized Deductions, Standard Deduction
Is the mortgage interest and real property tax I pay on a second residence deductible?
 
Answer:
Yes and maybe.

Mortgage interest paid on a second residence used personally is deductible as long as the mortgage satisfies the same requirements for deductible interest as on a primary residence.

If the home was acquired on or before December 15, 2017, then the total amount you (or your spouse if married filing a joint return) can treat as home acquisition debt on your main and second home is $1,000,000; or $500,000 if married filing separately. If the home was acquired after December 15, 2017, the home acquisition debt limit is $750,000; or $375,000 if married filing separately.

State and local real property taxes are generally deductible.

Deductible real property taxes include any state or local taxes based on the value of the real property and levied for the general public welfare.
Deductible real property taxes don't include taxes charged for local benefits and improvements that directly increase the value of the real property, such as assessments for sidewalks, water mains, sewer lines, parking lots, and similar improvements.
Also, an itemized charge for services to specific property or people isn't a real property tax, even if the charge is paid to the taxing authority. You can't deduct the charge as a real property tax when it's a unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), a periodic charge for a residential service (such as a $20 per month or $240 annual fee charged for trash collection), or a flat fee charged for a single service provided by your local government (such as a $30 charge for mowing your lawn because it had grown higher than permitted under a local ordinance).
The total deduction allowed for all state and local taxes (for example, real property taxes, personal property taxes, and income taxes or sales taxes) is limited to $10,000; or $5,000 if married filing separately.
Renting out your second residence - If you do rent out your second residence, and you use it personally, additional rules may impact the deductibility of mortgage interest and real property taxes. Please see the publications listed below for additional information.

Additional Information:
Tax Topic 503 - Deductible Taxes
Publication 527, Residential Rental Property (Including Rental of Vacation Homes)
Publication 530, Tax Information for Homeowners
Publication 550, Investment Income and Expenses
Publication 587, Business Use of Your Home
Instructions for Schedule A (Form 1040)
Tax Topic 505 - Interest Expense
Can I Deduct Personal Taxes That I Pay as an Itemized Deduction on Schedule A?
Subcategory:
Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses)
Category:
Itemized Deductions, Standard Deduction
I donated a used car to a qualified charity that sold the car immediately after I donated it. I would like to take the charitable contribution as an itemized deduction. Do I need to attach a special form to my return for the donation? What records should I keep?
 
Answer:
Recordkeeping and filing requirements depend on the amount you claim for the deduction.

1) If the deduction you claim for the car is at least $250 but not more than $500, you'll need a contemporaneous written acknowledgment from the charity. You must obtain the acknowledgment by the date you file your return for the donation year or by the return due date with extensions, whichever is earlier. The acknowledgment must include:

The name of the charitable organization.
The date and location of the charitable contribution.
A detailed description of the car.
Whether the charity provided you with any goods or services in return for the car and a description and good faith estimate of the value of any goods and services received.
If the charity provided solely intangible religious benefits, a statement to that effect.
Don't attach the written acknowledgment to your return. Instead, keep it with your records to substantiate your donation.

2) If the deduction you claim for the car is more than $500, the contemporaneous written acknowledgment from the charity must be timely, must be attached to your return, and must include all of the information listed in (1) above, plus the following additional information:

Your name and taxpayer identification number (TIN).
The vehicle identification number (VIN).
Beyond the above items, what the written acknowledgment must contain depends on what the charity does with the vehicle. If the charity sells the vehicle, the written acknowledgment must contain the date the car was sold by the charity, a certification that the charity sold the car in an arm’s length transaction between unrelated parties, the gross proceeds of the sale, and a statement that your deduction may not exceed the gross proceeds of the sale.
You must generally receive the written acknowledgment within 30 days of the sale of the car or, in certain circumstances, within 30 days of your donation, for the acknowledgment to be considered timely.  The charity may provide you a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, which contains the same information, in lieu of the written statement.

You must also complete Section A of Form 8283, Noncash Charitable Contributions and attach both the written acknowledgment and this form to your return.
 

Additional Information:
Can I Deduct My Charitable Contributions?
Instructions for Form 8283, Noncash Charitable Contributions (PDF)
Publication 526, Charitable Contributions
Publication 561, Determining the Value of Donated Property
Publication 4303, A Donor’s Guide to Vehicle Donations (PDF)
Tax Topic 506 - Charitable Contributions
Subcategory:
Gifts & Charitable Contributions
Category:
Itemized Deductions, Standard Deduction
My father is in a nursing home and I pay for the entire cost. Can I deduct these expenses on my tax return?
 
Answer:
If you, your spouse, or your dependent is in a nursing home primarily for medical care, then the entire nursing home cost (including meals and lodging) is deductible as a medical expense.
If that individual is in a home primarily for non-medical reasons, then only the cost of the actual medical care is deductible as a medical expense, not the cost of the meals and lodging.
To determine if your father qualifies as your dependent for this purpose, refer to Whose Medical Expenses Can You Include and Nursing Home in Publication 502, Medical and Dental Expenses.
Deduct medical expenses on Schedule A (Form 1040), Itemized Deductions.
The total amount of all allowable medical expenses is the amount of such expenses that exceeds 7.5% of adjusted gross income.
Additional Information:
Can I Deduct My Medical and Dental Expenses?
Subcategory:
Medical, Nursing Home, Special Care Expenses
Category:
Itemized Deductions, Standard Deduction
May I claim my job-related education expenses as an itemized deduction or an education credit on my tax return?
 
Answer:
Generally, you cannot deduct job-related education expenses as an itemized deduction. Certain exceptions apply. See Tax Topic 513, Work-Related Education Expenses. To determine if you qualify for any education credits for the work-related educational expenses you incur, refer to Publication 970,Tax Benefits for Education and Am I Eligible to Claim an Education Credit?
 

Additional Information:
Are My Work-Related Education Expenses Deductible?
Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits) (PDF)
Tax Benefits for Education: Information Center
Subcategory:
Education & Work-Related Expenses
Category:
Itemized Deductions, Standard Deduction