Published February 25, 2011
This time of year, figuring out your itemized tax deductions can feel like a guessing game. To get you headed in the right direction, here are 12 assorted expenses that might be confusing for many taxpayers. We answer the question for you: Is it deductible? Home or Apartment Rental Generally, no, since living expenses are not deductible. However, if you work from home and claim a home-office deduction, you may be able to claim all or part of your rental. If you can easily separate the expenses related to your home office (for example, it's a separate structure like a studio or a garage), you can deduct the actual expenses attributable to the space, including rent. However, if the expenses for your home office are difficult to separate from your home expenses, you can calculate your home office deduction by pro-rating the space attributable to your business compared with the overall total. For example, if your home office space is 200 square feet and your home is 2,000 square feet, you would claim 10% of your home-related expenses, including the rent, as a home office deduction; click here for more information on home office expenses. School Uniform No. The IRS does not allow deductions for school uniforms, even if required, for public, parochial or private schools. However, you may be able to use a tax-favored Educational Savings Account to help pay for "qualified education expenses," including uniforms. Sending Out Your Resume Yes. It's been a difficult year for a number of taxpayers. While you can't deduct the cost of looking for your first job, you can otherwise deduct expenses related to your job hunt. This would include, among other job search expenses, the cost of paper, printing and stamps for your resume and online expenses to post your resume to a service such as Monster.com. You must be looking for a job in the same profession as before; you cannot deduct the cost of looking for a job in a new profession. You also can't deduct job expenses if there has been a "substantial break" between leaving your last job and starting to look for a new job. You don't have to have success within a reasonable amount of time, but you do need to be looking. Gift to a Foreign Organization No (with a few exceptions). With all the natural disasters and wars occurring all over the world, you may be tempted to send your dollars overseas to help out. However, a gift made to a foreign organization is generally not tax deductible (certain Canadian, Israeli and Mexican charities serve as exceptions). A better bet if you want to make a difference in a foreign country is to make a donation to a qualified U.S. organization that offers aid in foreign country, such as the American Red Cross or Amnesty International USA. Cheerleading or Sports Camp Yes, if you're a professional cheerleader or athlete. But statistically, the number of taxpayers that applies to is pretty insignificant. For most taxpayers, the answer is no. Sports camps, including cheerleading camp, are considered personal expenses and are not deductible. Primary Landline in Your Home No. The IRS routinely considers a primary landline in your home as personal in nature, even if you use it for business. As a result, it's never deductible, though you may deduct out-of-pocket costs, such as a long distance charges, used for business. Exercise Machine No. As with most diets and health clubs, exercise machines aren't deductible, even if your doctor has recommended that you lose some weight in order to improve your health. You can only deduct medical expenses for the diagnosis, cure, mitigation, treatment or prevention of disease, but not the cost of expenses that are merely beneficial to your health. Bus Pass No. In many cities, taxpayers shell out hundreds of dollars each year for bus passes and transpasses. With so much money on the line, you might believe that it's deductible, but it's not. Bus passes and other transpasses are considered commuting costs, and those expenses are not deductible. However, you may benefit as an employee if your employer participates in a plan that allows you to use pretax dollars for transit passes and parking; ask your employer for details. Private School No. Private school costs for most elementary and high school students are not deductible. However, the costs of sending children below the level of kindergarten to nursery school, preschool or similar programs are deductible if they qualify as child care. There is a bright spot for parents of older children: If you can separate the educational piece from the child care piece, you may be able to deduct the latter. Additionally, expenses for before- or after-school care of a child in kindergarten or a higher grade at a private school may be deductible so long as the costs qualify as child care. Pregnancy Test
Yes. A pregnancy test, like any other diagnostic test (including, for example, a blood sugar test kit), is deductible. Over-the-Counter Medication No. Over-the-counter, or nonprescription medicines, are not deductible. This includes nicotine gum and certain nicotine patches -- though prescription-based smoking cessation medications can be deductible. Breastpump Yes. The IRS recently changed its position on breastfeeding supplies (including pumps and bottles) and deemed them deductible. However, the cost of infant formula remains nondeductible.