Where the tax savings are: Detailing deductions

The IRS is fairly liberal regarding deductible medical expenses. Lamaze classes, contact lens replacement insurance, treatments to quit smoking, reclining chairs and elastic hosiery can all be deductible. (See IRS Publication 502 for guidance.)

Long-term care insurance premiums also qualify as medical expenses. While those age 40 or younger can only deduct $290 for 2007, taxpayers age 71 and older may deduct up to $3,680, which makes beating that 7.5 percent minimum much easier.

“For more unusual health write-offs [like those requiring home improvements], get a note from your doctor stating why the expense was medically necessary,” advises Weltman.

“Certain professions receive special treatment for job-related expenses,” she observes. National Guardsmen and reservists, for instance, may be able to deduct some of their travel expenses for trips over 100 miles.

Teachers and teachers’ aides may take a $250 deduction for the supplies they buy for their classrooms.

Performing artists such as musicians, actors and dancers are allowed to deduct all their job-related expenses directly on Form 1040 — bypassing the typical income limitations — as long as they meet certain income criteria.

For most employees, deductions may be available for unreimbursed job-related expenses including subscriptions for work-related publications, business calls made on a personal cell phone or long distance calls made from a home phone. The caveat is that to get a deduction the total of all such miscellaneous expenses needs to exceed 2 percent of adjusted gross income.

In years where expenses related to job hunting can be added to the miscellaneous deduction mix, the odds of exceeding that 2 percent level improve immensely. It is not just the cost of printing new resumes, but the cost of traveling to the interviews along with resulting phone calls which may qualify as deductions.

If the job search results in moving expenses, they too may be deductible.

The primary caveats are that the job being sought cannot be the taxpayer’s first, and the expenses incurred cannot lead to a new profession. For more information on what qualifies see the IRS Web site’s rather user-friendly article on this topic.

Happy hunting
Finding deductions is hardly a challenge. Even the IRS offers suggestions on its Web site and tax software companies, like TurboTax, include deduction finding applications within their packages. Finding the time to determine just how many you qualify for, however, may be the bigger challenge.

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