Disclaimer ~ Please note that the aforementioned paragraphs provide guidelines and not conclusive evidence facts, rules, norms, instructions and laws, that can be used by any taxpayer. An analysis and consultancy of the IRS guidelines should be sought for, when in doubt.
The instructions for the Form 1040 Schedule A are quite easy to understand and fulfill. All you will need is the Form 1040 from the Internal Revenue Service (IRS), which can be either downloaded or can be requested by mail. Although, going to the main website and downloading the form is the faster method. The Form 1040 is the first form of the annual income tax return and the Schedule A is the first schedule that is to be filled by the tax payer. It must be noted that there are several other schedule and sub forms in the Form 1040, such as Form 1040 ES and 1040 NR.
Common Instructions for 1040 Schedule A
According to the IRS, the Form 1040 Schedule A is required to figure out your itemized deductions; it is to enlist your tax deductions which are itemized in nature. The standardized deduction is not to be claimed on this form. And when you include the deducted items on Schedule A, you are not supposed to add these items anywhere else on the Form 1040 or Schedule C, C-EZ, E, or Schedule F. The most important instructions for Form 1040 Schedule A include, the necessity of having original receipts and the proof of fulfillment of conditions that qualify you for the itemized tax deductions. Also note that these itemized deductions are deducted from your total income to derive the adjusted gross income.
Your medical and dental expenses, amounts paid for specific taxes and contributions, and unrestrained employee business expenses can be deducted for itemized deductions. If you are married and along with your spouse you have made any expenses, you can also claim them as itemized deductions.
Medical and Dental Expenditures
The total expenses that are shown on line 38 of Form 1040, you can deduct a certain part of the medical and dental expenses that exceed 7.5%. Medical insurance premiums (Medicare Part D), prescription medications, fees to all kinds of certified medical practitioners who have been declared eligible by the IRS, medical examinations such as blood tests, X-rays, and other related tests declared eligible by the IRS, nursing and hospital bills, supplemental medications, medical aid (eyeglasses, hearing aid, wheelchairs, crutches, braces), lodging, and ambulance services are some common deductions. The form contains all the eligibility deductions which you can claim in the return. Now even though there can be other medical and dental expenses incurred, it doesn't necessarily can be deducted. The medical and dental expanses span from lines 1-4.
Taxes Paid by You
From your current income, there are certain taxes that you cannot deduct or include in Schedule A of Form 1040. These include social security, excise and custom duties, and gift taxes. The instructions give a detailed list of the same. Now the deductible, already paid taxes are divided into two parts, that is the 'state and local income taxes' and the 'state and local general sales taxes'. The instructions state that any one head can become eligible for deduction. The constituents are enlisted in a comprehensive list in the instructions of Form 1040. The line 5 is used to opt for the said category. It must also be noted that the deductible category needs an evaluation, in the tax deduction worksheet that accompanies the 1040. This head also consists of property or 'real estate taxes' (line 6) and 'new motor vehicle taxes' (line 7).
In order to claim property tax deductions, you will have to go through Publication 530. Here, you can easily determine whether you are eligible to include the taxes for deductions. Similarly, for new vehicle taxes, there is a limitation on the date of purchase and the amount that can be claimed as deduction. As the figures can be dynamic, you will have to confirm them in the instructions. As for line 8, it indicates a few other deductible taxes, such as the ones that are paid to a foreign nation.
Interest Paid by You
Now, we will go over the interest you have paid to other becomes valid deductions under certain decorum. Publication 535 provides inputs in the matter. Commonly, in line 10, you will find the home mortgage interest along with points reported in Form 1098, refinancing (Publication 936), plus some points not included in the 1098 (line 11, 12), mortgage insurance premium (line 13) and investment interest (line 14), are deductible, and are subject to certain limitations.
Gifts to Charitable Organizations
Gifts for charitable purposes can be deducted, subject to certain limitations. The charitable organizations which are recognized by the IRS are stated in Publication 78 boy scouts, fraternal organizations, Federal and state government organized charitable factions, veteran's groups, non profits for specified medical conditions that have been recognized by the Federal or state governments.
In some cases a facility to carry over the already donated amounts in the previous year can be used. There are certain limitations of the amount of deduction that you can claim on the basis of charity. Apart from that, Form 1040 Schedule A demand statements from organization, denoting the donations. Charity in kind has some limitations, and there are conditions and limits for the amount that you can actually deduct.
Casualty and Theft Loss
Line 20 and Form 4684 denote the deductions that are claimed against casualty, theft and losses. The total amount of casualty and theft loss has to be more than $100 and should be more than 10% of the amount arising in the line 38 of the 1040, Schedule A.
Job Expenses and Miscellaneous Deductions
The last deduction for Schedule A is of job expenses, and covers line 21 to 27. As per IRS instructions, these expenses need to cross 2% of the total that arises at line 38. The instructional form contains all the items that can be valid grounds for deduction and the ones that cannot be claimed in a said deduction. Also check the 'other expenditure' and 'other deductions' that encompass the list that follows, there are some deductions that might be of help.
Apart from the information we gave you in this article, it is wise to understand the difference between itemized deductions and standard deductions. It will make it easier for you to decide which one would be the most logical one for you.
Following the accompanying instructions is an absolute necessity, and there are several items that are not counted as deducible by the IRS. Apart from that, not all itemized deductions can be claimed owing to the fact that the IRS imposes a certain percentage based upper and lower limit on the deduction.