Many common deductions are reported to you on official forms shortly before tax time. For example, mortgage interest is reported to you on a Form 1098 in the first few months of the year. Other deductions require a separate form that prompts you for information, such as Form 2106 for employee business expenses.
However, there are some deductions that are hard to track because they aren’t typically reported to you and aren’t required on a separate individual form, such as Form 2106 mentioned above. Many of these deductions are reported to the IRS on Schedule A. For more information, see Understanding Schedule A. In DeductionPro, you use the Medical and Other Deductions tab to track these deductions.
To keep track of medical and other deductions:
On the Enter Deductions tab, click Medical & Other Deductions, and then click New Deduction.
From the Category drop-down list, select the category that best fits the expense.
Note: If none of the categories listed apply, choose Other or Other Schedule A, Line 23 Items. For more information, refer to IRS Publication 529.
Select Other only if the item is:
A casualty and theft loss of income-producing property
Federal estate tax on income in respect of a decedent
Amortizable bond premium on bonds acquired before October 23, 1986
Deduction for repayment of amounts under a claim of right if over $3,000
Certain unrecovered investment in a pension or impairment-related work expenses of a disabled person (see IRS Publication 529 for more details)
Select Other Schedule A, Line 23 Items if the item is subject to the 2% of AGI limitation, when it is paid to produce or collect taxable income and manage or protect property held for earning income (i.e., not personal expenses).
Such items might include:
Certain legal and accounting fees
Clerical help and office rent
Custodial (for example, trust account) fees
Your share of the investment expenses of a regulated investment company
Certain losses on nonfederally insured deposits in insolvent or bankrupt financial institutions
Casualty and theft losses of property used in performing services as an employee
Deduction for repayment of amounts under a claim of right if under $3,000
In the Date box, type the date that you actually paid the expense in mm/dd/yyyy format.
Tip: You can also click the calendar icon beside the box to display a calendar from which you can select a date.
In the Description box, type a description of the expense that you incurred (up to 25 characters).
Tip: Use this field to keep notes that have enough detail to remind you of why you incurred the expense in case the IRS questions your deduction.
In the Amount box, type the dollar amount of the expense.
DeductionPro automatically saves your entry and updates Total Deductions and Est. Tax Savings when you leave the row.
To enter another deduction, click either New Deduction or New Recurring Deduction. Learn about recurring medical and other expenses
To print the list of medical and other deductions, click Print. When the Print Preview window appears, click the printer icon, and then click OK in the Print dialog box.
When you’re done entering medical and other deductions, click Save.
Note: DeductionPro automatically saves the entry as you complete each row. However, you must click Save to save the information entered in the last row.