Most taxpayers claim the standard deduction instead of itemizing. But if you're part of this filing majority, you're not necessarily shortchanged when it comes to tax write-offs.
Form 1040 contains a variety of adjustments to income, also known as above-the-line deductions because they appear just before the last line of that tax return's first page.
These claims will get your gross, or total, income down to a lower adjusted gross income, or AGI, amount, which is what goes on that last line of page 1 of Form 1040.
You don't have to fill out Schedule A or worry about meeting some AGI percentages before you can claim them. Just fill out the appropriate line on the tax return.
But if you do itemize, don't overlook these either. They are available to all qualifying taxpayers regardless of which deduction method they use.
And these write-offs are today's Daily Tax Tip.
Here are the 13 above-the-line deductions found on the 2012 version of Form 1040.
Line 23, Educator expenses:
Teachers and other qualified school employees can write
off up to $250 of unreimbursed personal money spent last year on
classroom supplies.
Line 24, Certain business expenses:
This applies to special job categories — military reservists,
performing artists and fee-basis government officials. You'll need to also fill out Form 2106 or 2106-EZ.
But that little bit of extra work is still better that what's required of other
workers with unreimbursed employee expenses. They still must claim them on Schedule A and meet that deduction's 2 percent threshold.
Line 25, Health savings accounts: Here you can write off your contributions to one of these medical coverage plans, commonly referred to as HSAs. You'll need more paperwork here, too, Form 8889.
Line 26, Moving expenses: Under certain circumstances, many of your relocation costs can be deducted from your gross income on this line. Fill out Form 3903 to determine the deductible amount.
Line 27, Self-employment tax:
If you worked for yourself, either full-time or as a side job to bring
in some extra spending money, you likely had to pay self-employment
tax. Half of that amount can be subtracted here.
Line 28, Self-employed retirement plan contributions:
Staying in the be-your-own-boss vein, if you were able to contribute
to a retirement plan (e.g., SEP-IRA or Keogh), note that amount here.
Line 29, Self-employed health insurance premiums: One more break for the independent worker. If you paid for your own medical policy, those premiums are fully deductible here.
Line 30, Early savings withdrawal penalties: If you had to cash in a CD and paid the price at your bank, you now can write off that fee.
Line 31, Alimony:
This is for the paying ex-spouse, not the recipient. You can deduct
this support money — but not any funds you paid to take care of your
kids.
Line 32, IRA contribution:
If you have a traditional IRA, you might be able to deduct some or all
of your contribution. This is the place to do so. Form 1040A filers
will find this deduction on line 17.
Line 33, Student loan interest: Write off up to $2,500 in interest on your school debt here. This write-off is on line 18 of the 1040A.
Line 34, Tuition and fees:
If you can claim the tuition and fees tax break, you can enter up to
$4,000 of those costs here. Use Form 8917 to determine your deduction amount.
Line 35, Domestic production activities:
This very specific line item is for taxpayers in the construction,
farming or even some artistic fields (films and recordings). If you
manufacture your product within U.S. borders, this
deduction could help you get to a lower AGI amount. Form 8903 is needed to claim this tax break.
OK, there are the 13 items promised in the headline. But wait. As also promised, there's more.
Line 36 says to add lines 23 through 35 and enter it here. You'll want to do that, but you also should check out the 1040 instruction book.
There you'll find that Line 36 is also where you can deduct a variety
of specialized expenses, such as costs related to income from the
rental of personal property, reforestation amortization and
contributions to certain pension plans. Even jury duty pay could come into play here.
These don't apply to a lot of taxpayers, but check them out just in case. You could be one of the few who gets to make a bit more adjustment to your gross income.
Found on Form 1040A, too: OK, a couple of these apply to you, but you really hate having to mess with the long Form 1040. Maybe you won't have to.
Four above-the-line deductions also are found on Form 1040A.
The educator expenses is on that shorter tax return's line 16.
Deduct your traditional IRA contributions on line 17.
Line 18 is where you can claim your student loan interest paid last tax year.
And tuition and fees are found on the 1040A's line 19.
If one (or more) of these four above-the-line deductions applies to your tax situation and you can file Form 1040A, then use that shorter form and claim your adjustments, too.
You also might find these items of interest:
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