- Itemized Deductions
- Future Developments.
- What's New
- Medical and Dental Expenses
- Examples of Medical and Dental Payments You Can Deduct
- Examples of Medical and Dental Payments You Can't Deduct
- Line 1
- Line 3
- Taxes You Paid
- Taxes You Can't Deduct
- Line 5
- State and Local Income Taxes
- State and Local General Sales Taxes
- Actual Expenses
- Optional Sales Tax Tables
- Instructions for the State and Local General Sales Tax Deduction Worksheet
- Line 6
- Line 7
- Line 8
- Interest You Paid
- Lines 10 and 11
- Line 12
- Line 13
- Line 14
- Gifts to Charity
- Examples of Qualified Charitable Organizations
- Amounts You Can Deduct
- Amounts You Can't Deduct
- Line 16
- Line 17
- Line 18
- Casualty and Theft Losses
- Job Expenses and Certain Miscellaneous Deductions
- Other Miscellaneous Deductions
- Total Itemized Deductions
2016 Instructions for Schedule A (Form 1040) (2016)
Use Schedule A (Form 1040) to figure your itemized deductions. In most cases, your federal income tax will be less if you take the larger of your itemized deductions or your standard deduction.
If you itemize, you can deduct a part of your medical and dental expenses and unreimbursed employee business expenses, and amounts you paid for certain taxes, interest, contributions, and miscellaneous expenses. You can also deduct certain casualty and theft losses.
If you and your spouse paid expenses jointly and are filing separate returns for 2016, see Pub. 504 to figure the portion of joint expenses that you can claim as itemized deductions.
Don't include on Schedule A items deducted elsewhere, such as on Form 1040 or Schedule C, C-EZ, E, or F.
For the latest information about developments related to Schedule A (Form 1040) and its instructions, such as legislation enacted after they were published, go to IRS.gov/schedulea.
Limit on itemized deductions.
Itemized deductions for taxpayers with adjusted gross incomes above $155,650 may be reduced. See Line 29, later.
Standard mileage rates.
The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 19 cents a mile. The business standard mileage rate is 54 cents a mile. The 2016 rate for use of your vehicle to do volunteer work for certain charitable organizations remains at 14 cents a mile.
You generally can deduct only the part of your medical and dental expenses that exceeds 10% of the amount on Form 1040, line 38. However, if either you or your spouse was born before January 2, 1952, you can deduct the part of your medical and dental expenses that exceeds 7.5% of the amount on Form 1040, line 38. See Line 3, later.
Pub. 502 discusses the types of expenses you can and cannot deduct. It also explains when you can deduct capital expenses and special care expenses for disabled persons.
If you received a distribution from a health savings account or a medical savings account in 2016, see Pub. 969 to figure your deduction.
To the extent you weren't reimbursed, you can deduct what you paid for:
Insurance premiums for medical and dental care, including premiums for qualified long-term care insurance contracts as defined in Pub. 502. But see Limit on long-term care premiums you can deduct, later. Reduce the insurance premiums by any self-employed health insurance deduction you claimed on Form 1040, line 29. You can't deduct insurance premiums paid with pretax dollars because the premiums aren't included in box 1 of your Form(s) W-2. If you are a retired public safety officer, you can't deduct any premiums you paid to the extent they were paid for with a tax-free distribution from your retirement plan.
If, during 2016, you were an eligible trade adjustment assistance (TAA) recipient, an alternative TAA (ATAA) recipient, reemployment TAA (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) payee, you must reduce your insurance premiums by any amounts used to figure the health coverage tax credit. See Line 1, later.
Prescription medicines or insulin.
Acupuncturists, chiropractors, dentists, eye doctors, medical doctors, occupational therapists, osteopathic doctors, physical therapists, podiatrists, psychiatrists, psychoanalysts (medical care only), and psychologists.
Medical examinations, X-ray and laboratory services, insulin treatment, and whirlpool baths your doctor ordered.
Diagnostic tests, such as a full-body scan, pregnancy test, or blood sugar test kit.
Nursing help (including your share of the employment taxes paid). If you paid someone to do both nursing and housework, you can deduct only the cost of the nursing help.
Hospital care (including meals and lodging), clinic costs, and lab fees.
Qualified long-term care services (see Pub. 502).
The supplemental part of Medicare insurance (Medicare B).
The premiums you pay for Medicare Part D insurance.
A program to stop smoking and for prescription medicines to alleviate nicotine withdrawal.
A weight-loss program as treatment for a specific disease (including obesity) diagnosed by a doctor.
Medical treatment at a center for drug or alcohol addiction.
Medical aids such as eyeglasses, contact lenses, hearing aids, braces, crutches, wheelchairs, and guide dogs, including the cost of maintaining them.
Surgery to improve defective vision, such as laser eye surgery or radial keratotomy.
Lodging expenses (but not meals) while away from home to receive medical care in a hospital or a medical care facility related to a hospital, provided there was no significant element of personal pleasure, recreation, or vacation in the travel. Don't deduct more than $50 a night for each eligible person.
Ambulance service and other travel costs to get medical care. If you used your own car, you can claim what you spent for gas and oil to go to and from the place you received the care; or you can claim 19 cents a mile. Add parking and tolls to the amount you claim under either method.
Cost of breast pumps and supplies that assist lactation.
Certain medical expenses paid out of a deceased taxpayer's estate can be claimed on the deceased taxpayer's final return. See Pub. 502 for details.
Limit on long-term care premiums you can deduct.
The amount you can deduct for qualified long-term care insurance contracts (as defined in Pub. 502) depends on the age, at the end of 2016, of the person for whom the premiums were paid. See the following chart for details.
|IF the person was, at the end of 2016, age . . .||THEN the most you can deduct is . . .|
|40 or under||$ 390|
|71 or older||$ 4,870|
If you were age 65 or older but not entitled to social security benefits, you can deduct premiums you voluntarily paid for Medicare A coverage.
The cost of diet food.
Cosmetic surgery unless it was necessary to improve a deformity related to a congenital abnormality, an injury from an accident or trauma, or a disfiguring disease.
Life insurance or income protection policies.
The Medicare tax on your wages and tips or the Medicare tax paid as part of the self-employment tax or household employment taxes.
Nursing care for a healthy baby. But you may be able to take a credit for the amount you paid. See the Instructions for Form 2441.
Illegal operations or drugs.
Imported drugs not approved by the U.S. Food and Drug Administration (FDA). This includes foreign-made versions of U.S.-approved drugs manufactured without FDA approval.
Nonprescription medicines, other than insulin (including nicotine gum and certain nicotine patches).
Travel your doctor told you to take for rest or a change.
Funeral, burial, or cremation costs.
Enter the total of your medical and dental expenses, after you reduce these expenses by any payments received from insurance or other sources. See Reimbursements, later.
If advance payments of the premium tax credit were made, or you think you may be eligible to claim a premium tax credit, fill out Form 8962 before filling out Schedule A, line 1. See Pub. 502 for how to figure your medical and dental expenses deduction.
Don't forget to include insurance premiums you paid for medical and dental care. But if you claimed the self-employed health insurance deduction on Form 1040, line 29, reduce the premiums by the amount on line 29.
If, during 2016, you were an eligible trade adjustment assistance (TAA) recipient, an alternative TAA (ATAA) recipient, reemployment TAA (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) payee, you must complete Form 8885 before completing Schedule A, line 1. When figuring the amount of insurance premiums you can deduct on Schedule A, don’t include any of the following.
Any amounts you included on Form 8885, line 4.
Any qualified health insurance coverage premiums you paid for eligible coverage months for which you received the benefit of the advance monthly payment program.
Any advance monthly payments your health plan administrator received from the IRS, as shown on Form 1099-H.
Whose medical and dental expenses can you include?
You can include medical and dental bills you paid in 2016 for anyone who was one of the following either when the services were provided or when you paid for them.
Yourself and your spouse.
All dependents you claim on your return.
Your child whom you don't claim as a dependent because of the rules for children of divorced or separated parents.
Any person you could have claimed as a dependent on your return except that person received $4,050 or more of gross income or filed a joint return.
Any person you could have claimed as a dependent except that you, or your spouse if filing jointly, can be claimed as a dependent on someone else's 2016 return.
You provided over half of your mother's support but can't claim her as a dependent because she received wages of $4,050 in 2016. You can include on line 1 any medical and dental expenses you paid in 2016 for your mother.
Insurance premiums for certain nondependents.
You may have a medical or dental insurance policy that also covers an individual who isn't your dependent (for example, a nondependent child under age 27). You can't deduct any premiums attributable to this individual, unless he or she is a person described under Whose medical and dental expenses can you include, earlier. However, if you had family coverage when you added this individual to your policy and your premiums didn't increase, you can enter on line 1 the full amount of your medical and dental insurance premiums. See Pub. 502 for more information.
If your insurance company paid the provider directly for part of your expenses, and you paid only the amount that remained, include on line 1 only the amount you paid. If you received a reimbursement in 2016 for medical or dental expenses you paid in 2016, reduce your 2016 expenses by this amount. If you received a reimbursement in 2016 for prior year medical or dental expenses, don't reduce your 2016 expenses by this amount. But if you deducted the expenses in the earlier year and the deduction reduced your tax, you must include the reimbursement in income on Form 1040, line 21. See Pub. 502 for details on how to figure the amount to include.
Don't include on line 1 insurance premiums paid by an employer-sponsored health insurance plan (cafeteria plan) unless the premiums are included in box 1 of your Form(s) W-2. Also, don't include any other medical and dental expenses paid by the plan unless the amount paid is included in box 1 of your Form(s) W-2.
Multiply line 2 by 10%. But, if either you or your spouse was born before January 2, 1952, multiply line 2 by 7.5%. The 7.5% rate applies whether you file a joint or separate return as long as one spouse was born before January 2, 1952.
If you are claiming the 7.5% threshold amount for medical and dental expenses, make sure you check the appropriate box(es) on line 39a of Form 1040 for your situation. If you can't check a box on line 39a of Form 1040, but either you or your spouse was born before January 2, 1952, attach a statement to your return indicating that you are applying the 7.5% threshold because you or your spouse meets the requirements.
Death before age 65.
A taxpayer is considered to be age 65 on the day before the taxpayer's 65th birthday. If the taxpayer wasn't age 65 or older at the time of death, the 7.5% threshold doesn't apply for that taxpayer or the spouse of that taxpayer who is under age 65. For example, a taxpayer who was born on February 14, 1951, dies on February 13, 2016. The taxpayer is considered age 65 at the time of death and the 7.5% threshold applies. However, if the taxpayer died on February 12, 2016, the taxpayer isn't considered age 65 and the 7.5% threshold doesn't apply.
Federal income and most excise taxes.
Social security, Medicare, federal unemployment (FUTA), and railroad retirement (RRTA) taxes.
Federal estate and gift taxes. But see Line 28, later.
Certain state and local taxes, including tax on gasoline, car inspection fees, assessments for sidewalks or other improvements to your property, tax you paid for someone else, and license fees (marriage, driver's, dog, etc.).
You can elect to deduct state and local general sales taxes instead of state and local income taxes. You can't deduct both.
If you elect to deduct state and local income taxes, you must check box a on line 5. Include on this line the state and local income taxes listed next.
State and local income taxes withheld from your salary during 2016. Your Form(s) W-2 will show these amounts. Forms W-2G, 1099-G, 1099-R, and 1099-MISC may also show state and local income taxes withheld.
State and local income taxes paid in 2016 for a prior year, such as taxes paid with your 2015 state or local income tax return. Don't include penalties or interest.
State and local estimated tax payments made during 2016, including any part of a prior year refund that you chose to have credited to your 2016 state or local income taxes.
Mandatory contributions you made to the California, New Jersey, or New York Nonoccupational Disability Benefit Fund, Rhode Island Temporary Disability Benefit Fund, or Washington State Supplemental Workmen's Compensation Fund.
Mandatory contributions to the Alaska, California, New Jersey, or Pennsylvania state unemployment fund.
Mandatory contributions to state family leave programs, such as the New Jersey Family Leave Insurance (FLI) program and the California Paid Family Leave program.
Don't reduce your deduction by any:
State or local income tax refund or credit you expect to receive for 2016, or
Refund of, or credit for, prior year state and local income taxes you actually received in 2016. Instead, see the instructions for Form 1040, line 10.
If you elect to deduct state and local general sales taxes, you must check box b on line 5. To figure your deduction, you can use either your actual expenses or the optional sales tax tables.
Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) you paid in 2016 if the tax rate was the same as the general sales tax rate. However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. Motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. Also include any state and local general sales taxes paid for a leased motor vehicle. Don't include sales taxes paid on items used in your trade or business.
You must keep your actual receipts showing general sales taxes paid to use this method.
Refund of general sales taxes.
If you received a refund of state or local general sales taxes in 2016 for amounts paid in 2016, reduce your actual 2016 state and local general sales taxes by this amount. If you received a refund of state or local general sales taxes in 2016 for prior year purchases, don't reduce your 2016 state and local general sales taxes by this amount. But if you deducted your actual state and local general sales taxes in the earlier year and the deduction reduced your tax, you may have to include the refund in income on Form 1040, line 21. See Recoveries in Pub. 525 for details.
Instead of using your actual expenses, you can use the 2016 Optional State Sales Tax Table and the 2016 Optional Local Sales Tax Tables at the end of these instructions to figure your state and local general sales tax deduction. You may also be able to add the state and local general sales taxes paid on certain specified items.
To figure your state and local general sales tax deduction using the tables, complete the State and Local General Sales Tax Deduction Worksheet or use the Sales Tax Deduction Calculator at IRS.gov/salestax.
If your filing status is married filing separately, both you and your spouse elect to deduct sales taxes, and your spouse elects to use the optional sales tax tables, you also must use the tables to figure your state and local general sales tax deduction.
Instead of using this worksheet, you can find your deduction by using the Sales Tax Deduction Calculator at IRS.gov.
Before you begin:
See the instructions for line 1 of the worksheet if you:
|1.||Enter your state general sales taxes from the 2016 Optional State Sales Tax Table||1.||$|
|Next. If, for all of 2016, you lived only in Connecticut, the District of Columbia, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Jersey, or Rhode Island, skip lines 2 through 5, enter -0- on line 6, and go to line 7. Otherwise, go to line 2.|
|2.||Did you live in Alaska, Arizona, Arkansas, Colorado, Georgia, Illinois, Louisiana, Mississippi, Missouri, New York, North Carolina, South Carolina, Tennessee, Utah, or Virginia in 2016?|
||No. Enter -0-.||2.||$|
||Yes. Enter your base local general sales taxes from the 2016 Optional Local Sales Tax Tables.|
|3.||Did your locality impose a local general sales tax in 2016? Residents of California and Nevada, see the instructions for line 3 of the worksheet.|
||No. Skip lines 3 through 5, enter -0- on line 6, and go to line 7.|
||Yes. Enter your local general sales tax rate, but omit the percentage sign. For example, if your local general sales tax rate was 2.5%, enter 2.5. If your local general sales tax rate changed or you lived in more than one locality in the same state during 2016, see the instructions for line 3 of the worksheet||3.||.|
|4.||Did you enter -0- on line 2?|
||No. Skip lines 4 and 5 and go to line 6.|
||Yes. Enter your state general sales tax rate (shown in the table heading for your state), but omit the percentage sign. For example, if your state general sales tax rate is 6%, enter 6.0||4.||.|
|5.||Divide line 3 by line 4. Enter the result as a decimal (rounded to at least three places)||5.||.|
|6.||Did you enter -0- on line 2?|
||No. Multiply line 2 by line 3.||6.||$|
||Yes. Multiply line 1 by line 5. If you lived in more than one locality in the same state during 2016, see the instructions for line 6 of the worksheet.|
|7.||Enter your state and local general sales taxes paid on specified items, if any. See the instructions for line 7 of the worksheet||7.||$|
|8.||Deduction for general sales taxes. Add lines 1, 6, and 7. Enter the result here and the total from all your state and local general sales tax deduction worksheets, if you completed more than one, on Schedule A, line 5. Be sure to check box b on that line||8.||$|
If you lived in the same state for all of 2016, enter the applicable amount, based on your 2016 income and exemptions, from the 2016 Optional State Sales Tax Table for your state. Read down the "At least–But less than" columns for your state and find the line that includes your 2016 income. If married filing separately, don't include your spouse's income. Your 2016 income is the amount shown on your Form 1040, line 38, plus any nontaxable items, such as the following.
Nontaxable combat pay.
Nontaxable part of social security and railroad retirement benefits.
Nontaxable part of IRA, pension, or annuity distributions. Don't include rollovers.
Public assistance payments.
The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d.
If you lived in more than one state during 2016, look up the table amount for each state using the rules stated earlier. If there is no table for your state, the table amount is considered to be zero. Multiply the table amount for each state you lived in by a fraction. The numerator of the fraction is the number of days you lived in the state during 2016 and the denominator is the total number of days in the year (366). Enter the total of the prorated table amounts for each state on line 1. However, if you also lived in a locality during 2016 that imposed a local general sales tax, don't enter the total on line 1. Instead, complete a separate worksheet for each state you lived in and enter the prorated amount for that state on line 1.
You lived in State A from January 1 through August 31, 2016 (244 days), and in State B from September 1 through December 31, 2016 (122 days). The table amount for State A is $500. The table amount for State B is $400. You would figure your state general sales tax as follows.
|State A:||$500 x 244/366 =||$333|
|State B:||$400 x 122/366 =||133|
If none of the localities in which you lived during 2016 imposed a local general sales tax, enter $466 on line 1 of your worksheet. Otherwise, complete a separate worksheet for State A and State B. Enter $333 on line 1 of the State A worksheet and $133 on line 1 of the State B worksheet.
If you checked the "No" box, enter -0- on line 2, and go to line 3. If you checked the "Yes" box and lived in the same locality for all of 2016, enter the applicable amount, based on your 2016 income and exemptions, from the 2016 Optional Local Sales Tax Tables for your locality. Read down the "At least–But less than" columns for your locality and find the line that includes your 2016 income. See the instructions for line 1 of the worksheet to figure your 2016 income. The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d.
If you lived in more than one locality during 2016, look up the table amount for each locality using the rules stated earlier. If there is no table for your locality, the table amount is considered to be zero. Multiply the table amount for each locality you lived in by a fraction. The numerator of the fraction is the number of days you lived in the locality during 2016 and the denominator is the total number of days in the year (366). If you lived in more than one locality in the same state and the local general sales tax rate was the same for each locality, enter the total of the prorated table amounts for each locality in that state on line 2. Otherwise, complete a separate worksheet for lines 2 through 6 for each locality and enter each prorated table amount on line 2 of the applicable worksheet.
You lived in Locality 1 from January 1 through August 31, 2016 (244 days), and in Locality 2 from September 1 through December 31, 2016 (122 days). The table amount for Locality 1 is $100. The table amount for Locality 2 is $150. You would figure the amount to enter on line 2 as follows. Note that this amount may not equal your local sales tax deduction, which is figured on line 6 of the worksheet.
|Locality 1:||$100 x 244/366 =||$ 67|
|Locality 2:||$150 x 122/366 =||50|
If you lived in California, check the "No" box if your combined state and local general sales tax rate is 7.5000%. Otherwise, check the "Yes" box and include on line 3 only the part of the combined rate that is more than 7.5000%.
If you lived in Nevada, check the "No" box if your combined state and local general sales tax rate is 6.8500%. Otherwise, check the "Yes" box and include on line 3 only the part of the combined rate that is more than 6.8500%.
If you checked the "Yes" box and your local general sales tax rate changed during 2016, figure the rate to enter on line 3 as follows. Multiply each tax rate for the period it was in effect by a fraction. The numerator of the fraction is the number of days the rate was in effect during 2016 and the denominator is the total number of days in the year (366). Enter the total of the prorated tax rates on line 3.
Locality 1 imposed a 1% local general sales tax from January 1 through September 30, 2016 (274 days). The rate increased to 1.75% for the period from October 1 through December 31, 2016 (92 days). You would enter "1.189" on line 3, figured as follows.
|January 1 – September 30:||1.00 x 274/366 =||0.749|
|October 1 – December 31:||1.75 x 92/366 =||0.440|
Complete a separate worksheet for lines 2 through 6 for each locality in your state if you lived in more than one locality in the same state during 2016 and each locality didn't have the same local general sales tax rate.
To figure the amount to enter on line 3 of the worksheet for each locality in which you lived (except a locality for which you used the 2016 Optional Local Sales Tax Tables to figure your local general sales tax deduction), multiply the local general sales tax rate by a fraction. The numerator of the fraction is the number of days you lived in the locality during 2016 and the denominator is the total number of days in the year (366).
You lived in Locality 1 from January 1 through August 31, 2016 (244 days), and in Locality 2 from September 1 through December 31, 2016 (122 days). The local general sales tax rate for Locality 1 is 1%. The rate for Locality 2 is 1.75%. You would enter "0.667" on line 3 for the Locality 1 worksheet and "0.583" for the Locality 2 worksheet, figured as follows.
|Locality 1:||1.00 x 244/366 =||0.667|
|Locality 2:||1.75 x 122/366 =||0.583|
If you lived in more than one locality in the same state during 2016, you should have completed line 1 only on the first worksheet for that state and separate worksheets for lines 2 through 6 for any other locality within that state in which you lived during 2016. If you checked the "Yes" box on line 6 of any of those worksheets, multiply line 5 of that worksheet by the amount that you entered on line 1 for that state on the first worksheet.
Enter on line 7 any state and local general sales taxes paid on the following specified items. If you are completing more than one worksheet, include the total for line 7 on only one of the worksheets.
A motor vehicle (including a car, motorcycle, motor home, recreational vehicle, sport utility vehicle, truck, van, and off-road vehicle). Also include any state and local general sales taxes paid for a leased motor vehicle. If the state sales tax rate on these items is higher than the general sales tax rate, only include the amount of tax you would have paid at the general sales tax rate.
An aircraft or boat, if the tax rate was the same as the general sales tax rate.
A home (including a mobile home or prefabricated home) or substantial addition to or major renovation of a home, but only if the tax rate was the same as the general sales tax rate and any of the following applies.
Your state or locality imposes a general sales tax directly on the sale of a home or on the cost of a substantial addition or major renovation.
You purchased the materials to build a home or substantial addition or to perform a major renovation and paid the sales tax directly.
Under your state law, your contractor is considered your agent in the construction of the home or substantial addition or the performance of a major renovation. The contract must state that the contractor is authorized to act in your name and must follow your directions on construction decisions. In this case, you will be considered to have purchased any items subject to a sales tax and to have paid the sales tax directly.
Don't include sales taxes paid on items used in your trade or business. If you received a refund of state or local general sales taxes in 2016, see Refund of general sales taxes, earlier.
If you are a homeowner who received assistance under a State Housing Finance Agency Hardest Hit Fund program or an Emergency Homeowners' Loan program, see Pub. 530 for the amount you can deduct on line 6.
Include taxes (state, local, or foreign) you paid on real estate you own that wasn't used for business, but only if the taxes are assessed uniformly at a like rate on all real property throughout the community, and the proceeds are used for general community or governmental purposes. Pub. 530 explains the deductions homeowners can take.
Don't include the following amounts on line 6.
Itemized charges for services to specific property or persons (for example, a $20 monthly charge per house for trash collection, a $5 charge for every 1,000 gallons of water consumed, or a flat charge for mowing a lawn that had grown higher than permitted under a local ordinance).
Charges for improvements that tend to increase the value of your property (for example, an assessment to build a new sidewalk). The cost of a property improvement is added to the basis of the property. However, a charge is deductible if it is used only to maintain an existing public facility in service (for example, a charge to repair an existing sidewalk, and any interest included in that charge).
If your mortgage payments include your real estate taxes, you can deduct only the amount the mortgage company actually paid to the taxing authority in 2016.
If you sold your home in 2016, any real estate tax charged to the buyer should be shown on your settlement statement and in box 5 of any Form 1099-S you received. This amount is considered a refund of real estate taxes. See Refunds and rebates, later. Any real estate taxes you paid at closing should be shown on your settlement statement.
You must look at your real estate tax bill to decide if any nondeductible itemized charges, such as those listed earlier, are included in the bill. If your taxing authority (or lender) doesn't furnish you a copy of your real estate tax bill, ask for it.
Refunds and rebates.
If you received a refund or rebate in 2016 of real estate taxes you paid in 2016, reduce your deduction by the amount of the refund or rebate. If you received a refund or rebate in 2016 of real estate taxes you paid in an earlier year, don't reduce your deduction by this amount. Instead, you must include the refund or rebate in income on Form 1040, line 21, if you deducted the real estate taxes in the earlier year and the deduction reduced your tax. See Recoveries in Pub. 525 for details on how to figure the amount to include in income.
Enter the state and local personal property taxes you paid, but only if the taxes were based on value alone and were imposed on a yearly basis.
You paid a yearly fee for the registration of your car. Part of the fee was based on the car's value and part was based on its weight. You can deduct only the part of the fee that was based on the car's value.
If you had any deductible tax not listed on line 5, 6, or 7, list the type and amount of tax. Enter only one total on line 8. Include on this line income tax you paid to a foreign country or U.S. possession.
You may want to take a credit for the foreign tax instead of a deduction. See the instructions for Form 1040, line 48, for details.
The rules for deducting interest vary, depending on whether the loan proceeds are used for business, personal, or investment activities. See Pub. 535 for more information about deducting business interest expenses. See Pub. 550 for more information about deducting investment interest expenses. You can't deduct personal interest. However, you can deduct qualified home mortgage interest (on your Schedule A) and interest on certain student loans (on line 33 of your Form 1040), as explained in Pub. 936 and Pub. 970.
If you use the proceeds of a loan for more than one purpose (for example, personal and business), you must allocate the interest on the loan to each use. However, you don't have to allocate home mortgage interest if it is fully deductible, regardless of how the funds are used.
You allocate interest (other than fully deductible home mortgage interest) on a loan in the same way as the loan is allocated. You do this by tracing disbursements of the debt proceeds to specific uses. For more information on allocating interest, see Pub. 535.
In general, if you paid interest in 2016 that applies to any period after 2016, you can deduct only amounts that apply for 2016.
Use Schedule A to deduct qualified home mortgage interest and investment interest.
If you are a homeowner who received assistance under a State Housing Finance Agency Hardest Hit Fund program or an Emergency Homeowners' Loan program, see Pub. 530 for the amount you can deduct on line 10 or 11.
A home mortgage is any loan that is secured by your main home or second home. It includes first and second mortgages, home equity loans, and refinanced mortgages.
A home can be a house, condominium, cooperative, mobile home, boat, or similar property. It must provide basic living accommodations including sleeping space, toilet, and cooking facilities.
Limit on home mortgage interest.
If you took out any mortgages after October 13, 1987, your deduction may be limited. Any additional amounts borrowed after October 13, 1987, on a line-of-credit mortgage you had on that date are treated as a mortgage taken out after October 13, 1987. If you refinanced a mortgage you had on October 13, 1987, treat the new mortgage as taken out on or before October 13, 1987. But if you refinanced for more than the balance of the old mortgage, treat the excess as a mortgage taken out after October 13, 1987.
See Pub. 936 to figure your deduction if either (1) or (2) next applies. If you had more than one home at the same time, the dollar amounts in (1) and (2) apply to the total mortgages on both homes.
You, or your spouse if filing jointly, took out any mortgages after October 13, 1987, and used the proceeds for purposes other than to buy, build, or improve your home, and all of these mortgages totaled over $100,000 at any time during 2016. The limit is $50,000 if married filing separately. An example of this type of mortgage is a home equity loan used to pay off credit card bills, buy a car, or pay tuition.
You, or your spouse if filing jointly, took out any mortgages after October 13, 1987, and used the proceeds to buy, build, or improve your home, and these mortgages plus any mortgages you took out on or before October 13, 1987, totaled over $1 million at any time during 2016. The limit is $500,000 if married filing separately.
If the total amount of all mortgages is more than the fair market value of the home, additional limits apply. See Pub. 936.
Enter on line 10 mortgage interest and points reported to you on Form 1098. If your Form 1098 shows any refund of overpaid interest, don't reduce your deduction by the refund. Instead, see the instructions for Form 1040, line 21. If you and at least one other person (other than your spouse if filing jointly) were liable for and paid interest on the mortgage, and the interest was reported on the other person's Form 1098, report your share of the interest on line 11 (as explained in Line 11, later).
If you paid more interest to the recipient than is shown on Form 1098, see Pub. 936 to find out if you can deduct the additional interest. If you can, attach a statement to your paper return explaining the difference and enter "See attached" to the right of line 10.
If you are claiming the mortgage interest credit (for holders of qualified mortgage credit certificates issued by state or local governmental units or agencies), subtract the amount shown on Form 8396, line 3, from the total deductible interest you paid on your home mortgage. Enter the result on line 10.
If you paid home mortgage interest and it wasn't reported to you on Form 1098, report your deductible mortgage interest on line 11.
If you paid home mortgage interest to the person from whom you bought the home, write that person's name, identifying number, and address on the dotted lines next to line 11. If the recipient of your home mortgage payment(s) is an individual, the identifying number is his or her social security number (SSN). Otherwise, it is the employer identification number. You must also let the recipient know your SSN. If you don't show the required information about the recipient or let the recipient know your SSN, you may have to pay a $50 penalty.
If you and at least one other person (other than your spouse if filing jointly) were liable for and paid interest on the mortgage, and the home mortgage interest paid was reported on the other person's Form 1098, attach a statement to your paper return listing the name and address of that person. To the right of line 11, enter "See attached."
Points are shown on your settlement statement. Points you paid only to borrow money are generally deductible over the life of the loan. See Pub. 936 to figure the amount you can deduct. Points paid for other purposes, such as for a lender's services, aren't deductible.
Generally, you must deduct points you paid to refinance a mortgage over the life of the loan. This is true even if the new mortgage is secured by your main home.
If you used part of the proceeds to improve your main home, you may be able to deduct the part of the points related to the improvement in the year paid. See Pub. 936 for details.
If you paid off a mortgage early, deduct any remaining points in the year you paid off the mortgage. However, if you refinanced your mortgage with the same lender, see Mortgage ending early in Pub. 936 for an exception.
Enter the qualified mortgage insurance premiums you paid under a mortgage insurance contract issued after December 31, 2006, in connection with home acquisition debt that was secured by your first or second home. Box 5 of Form 1098 shows the amount of premiums you paid in 2016. If you and at least one other person (other than your spouse if filing jointly) were liable for and paid the premiums in connection with the loan, and the premiums were reported on the other person's Form 1098, report your share of the premiums on line 13. See Prepaid mortgage insurance premiums, later, if you paid any premiums allocable to any period after 2016.
Qualified mortgage insurance is mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration, or the Rural Housing Service (or their successor organizations), and private mortgage insurance (as defined in section 2 of the Homeowners Protection Act of 1998 as in effect on December 20, 2006).
Mortgage insurance provided by the Department of Veterans Affairs and the Rural Housing Service is commonly known as a funding fee and guarantee fee, respectively. These fees can be deducted fully in 2016 if the mortgage insurance contract was issued in 2016. Contact the mortgage insurance issuer to determine the deductible amount if it isn't included in box 5 of Form 1098.
Prepaid mortgage insurance premiums.
If you paid qualified mortgage insurance premiums that are allocable to periods after 2016, you must allocate them over the shorter of:
The stated term of the mortgage, or
84 months, beginning with the month the insurance was obtained.
The premiums are treated as paid in the year to which they are allocated. If the mortgage is satisfied before its term, no deduction is allowed for the unamortized balance. See Pub. 936 for details.
The allocation rules, explained earlier, don't apply to qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service (or their successor organizations).
Limit on amount you can deduct.
You can't deduct your mortgage insurance premiums if the amount on Form 1040, line 38, is more than $109,000 ($54,500 if married filing separately). If the amount on Form 1040, line 38, is more than $100,000 ($50,000 if married filing separately), your deduction is limited and you must use the Mortgage Insurance Premiums Deduction Worksheet to figure your deduction.
Before you begin:
|1.||Enter the total premiums you paid in 2016 for qualified mortgage insurance for a contract issued after December 31, 2006||1.|
|2.||Enter the amount from Form 1040, line 38||2.|
|3.||Enter $100,000 ($50,000 if married filing separately)||3.|
|4.||Is the amount on line 2 more than the amount on line 3?|
||Your deduction isn't limited. Enter the amount from line 1 of this worksheet on Schedule A, line 13. Don't complete the rest of this worksheet.|
||Subtract line 3 from line 2. If the result isn't a multiple of $1,000 ($500 if married filing separately), increase it to the next multiple of $1,000 ($500 if married filing separately). For example, increase $425 to $1,000, increase $2,025 to $3,000; or if married filing separately, increase $425 to $500, increase $2,025 to $2,500, etc.||4.|
|5.||Divide line 4 by $10,000 ($5,000 if married filing separately). Enter the result as a decimal. If the result is 1.0 or more, enter 1.0||5.||.|
|6.||Multiply line 1 by line 5||6.|
|7.||Mortgage insurance premiums deduction. Subtract line 6 from line 1. Enter the result here and on Schedule A, line 13||7.|
Investment interest is interest paid on money you borrowed that is allocable to property held for investment. It doesn't include any interest allocable to passive activities or to securities that generate tax-exempt income.
Complete and attach Form 4952 to figure your deduction.
You don't have to file Form 4952 if all three of the following apply.
Your investment interest expense isn't more than your investment income from interest and ordinary dividends minus any qualified dividends.
You have no other deductible investment expenses.
You have no disallowed investment interest expense from 2015.
Alaska Permanent Fund dividends, including those reported on Form 8814, aren't investment income.
For more details, see Pub. 550.
You can deduct contributions or gifts you gave to organizations that are religious, charitable, educational, scientific, or literary in purpose. You can also deduct what you gave to organizations that work to prevent cruelty to children or animals. Certain whaling captains may be able to deduct expenses paid in 2016 for Native Alaskan subsistence bowhead whale hunting activities. See Pub. 526 for details.
To verify an organization's charitable status, you can:
Check with the organization to which you made the donation. The organization should be able to provide you with verification of its charitable status.
Use our online search tool Exempt Organizations Select Check to see if an organization is eligible to receive tax-deductible contributions (Publication 78 data). You can access Exempt Organizations Select Check on IRS.gov. Click on Tools then on Exempt Organizations Select Check.
Churches, mosques, synagogues, temples, etc.
Boy Scouts, Boys and Girls Clubs of America, CARE, Girl Scouts, Goodwill Industries, Red Cross, Salvation Army, United Way, etc.
Fraternal orders, if the gifts will be used for the purposes listed under Gifts to Charity, earlier.
Veterans' and certain cultural groups.
Nonprofit hospitals, and organizations whose purpose is to find a cure for, or help people who have, arthritis, asthma, birth defects, cancer, cerebral palsy, cystic fibrosis, diabetes, heart disease, hemophilia, mental illness or retardation, multiple sclerosis, muscular dystrophy, tuberculosis, etc.
Most nonprofit educational organizations, such as colleges, but only if your contribution isn't a substitute for tuition or other enrollment fees.
Federal, state, and local governments if the gifts are solely for public purposes.
Contributions can be in cash, property, or out-of-pocket expenses you paid to do volunteer work for the kinds of organizations described earlier. If you drove to and from the volunteer work, you can take the actual cost of gas and oil or 14 cents a mile. Add parking and tolls to the amount you claim under either method. But don't deduct any amounts that were repaid to you.
Gifts from which you benefit.
If you made a gift and received a benefit in return, such as food, entertainment, or merchandise, you can generally only deduct the amount that is more than the value of the benefit. But this rule doesn't apply to certain membership benefits provided in return for an annual payment of $75 or less or to certain items or benefits of token value. For details, see Pub. 526.
You paid $70 to a charitable organization to attend a fund-raising dinner and the value of the dinner was $40. You can deduct only $30.
Gifts of $250 or more.
You can deduct a gift of $250 or more only if you have a statement from the charitable organization showing the information in (1) and (2) next.
The amount of any money contributed and a description (but not value) of any property donated.
Whether the organization did or did not give you any goods or services in return for your contribution. If you did receive any goods or services, a description and estimate of the value must be included. If you received only intangible religious benefits (such as admission to a religious ceremony), the organization must state this, but it doesn't have to describe or value the benefit.
In figuring whether a gift is $250 or more, don't combine separate donations. For example, if you gave your church $25 each week for a total of $1,300, treat each $25 payment as a separate gift. If you made donations through payroll deductions, treat each deduction from each paycheck as a separate gift. See Pub. 526 if you made a separate gift of $250 or more through payroll deduction.
You must get the statement by the date you file your return or the due date (including extensions) for filing your return, whichever is earlier. Don't attach the statement to your return. Instead, keep it for your records.
Limit on the amount you can deduct.
See Pub. 526 to figure the amount of your deduction if any of the following applies.
Your cash contributions or contributions of ordinary income property are more than 30% of the amount on Form 1040, line 38.
Your gifts of capital gain property are more than 20% of the amount on Form 1040, line 38.
You gave gifts of property that increased in value or gave gifts of the use of property.
Travel expenses (including meals and lodging) while away from home, unless there was no significant element of personal pleasure, recreation, or vacation in the travel.
Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups.
Cost of raffle, bingo, or lottery tickets. But you may be able to deduct these expenses on line 28. See Line 28, later, for more information on gambling losses.
Value of your time or services.
Value of blood given to a blood bank.
The transfer of a future interest in tangible personal property (generally, until the entire interest has been transferred).
Gifts to individuals and groups that are run for personal profit.
Gifts to foreign organizations. But you may be able to deduct gifts to certain U.S. organizations that transfer funds to foreign charities and certain Canadian, Israeli, and Mexican charities. See Pub. 526 for details.
Gifts to organizations engaged in certain political activities that are of direct financial interest to your trade or business. See section 170(f)(9).
Gifts to groups whose purpose is to lobby for changes in the laws.
Gifts to civic leagues, social and sports clubs, labor unions, and chambers of commerce.
Value of benefits received in connection with a contribution to a charitable organization. See Pub. 526 for exceptions.
Cost of tuition. But you may be able to deduct this as a job education expense on line 21; as a tuition and fees deduction on Form 1040, line 34; or take an education credit (see Form 8863).
Enter on line 16 the total value of gifts you made in cash or by check (including out-of-pocket expenses).
For any contribution made in cash, regardless of the amount, you must maintain as a record of the contribution a bank record (such as a canceled check or credit card statement) or a written record from the charity. The written record must include the name of the charity, date, and amount of the contribution. If you made contributions through payroll deduction, see Pub. 526 for information on the records you must keep. Don't attach the record to your tax return. Instead, keep it with your other tax records.
Enter on line 17 the total value of your contributions of property other than by cash or check. If you gave used items, such as clothing or furniture, deduct their fair market value at the time you gave them. Fair market value is what a willing buyer would pay a willing seller when neither has to buy or sell and both are aware of the conditions of the sale. For more details on determining the value of donated property, see Pub. 561.
If the amount of your deduction is more than $500, you must complete and attach Form 8283. For this purpose, the "amount of your deduction" means your deduction before applying any income limits that could result in a carryover of contributions. If you deduct more than $500 for a contribution of a motor vehicle, boat, or airplane, you must also attach a statement from the charitable organization to your paper return. The organization may use Form 1098-C to provide the required information. If your total deduction is over $5,000 ($500 for certain contributions of clothing and household items (discussed next)), you may also have to get appraisals of the values of the donated property. See Form 8283 and its instructions for details.
Contributions of clothing and household items.
A deduction for these contributions will be allowed only if the items are in good used condition or better. However, this rule doesn't apply to a contribution of any single item for which a deduction of more than $500 is claimed and for which you include a qualified appraisal and Form 8283 with your tax return.
If you gave property, you should keep a receipt or written statement from the organization you gave the property to, or a reliable written record, that shows the organization's name and address, the date and location of the gift, and a description of the property. For each gift of property, you should also keep reliable written records that include:
How you figured the property's value at the time you gave it. If the value was determined by an appraisal, keep a signed copy of the appraisal.
The cost or other basis of the property if you must reduce it by any ordinary income or capital gain that would have resulted if the property had been sold at its fair market value.
How you figured your deduction if you chose to reduce your deduction for gifts of capital gain property.
Any conditions attached to the gift.
If your total deduction for gifts of property is over $500, you gave less than your entire interest in the property, or you made a qualified conservation contribution, your records should contain additional information. See Pub. 526 for details.
You may have contributions that you couldn't deduct in an earlier year because they exceeded the limits on the amount you could deduct. In most cases, you have 5 years to use contributions that were limited in an earlier year. The same limits apply this year to your carryover amounts as applied to those amounts in the earlier year. After applying those limits, enter the amount of your carryover that you are allowed to deduct this year. See Pub. 526 for details.
Complete and attach Form 4684 to figure the amount of your loss to enter on line 20.
You may be able to deduct part or all of each loss caused by theft, vandalism, fire, storm, or similar causes; car, boat, and other accidents; and corrosive drywall. You may also be able to deduct money you had in a financial institution but lost because of the insolvency or bankruptcy of the institution.
You can deduct personal casualty or theft losses only to the extent that:
The amount of each separate casualty or theft loss is more than $100, and
The total amount of all losses during the year (reduced by the $100 limit discussed in (1)) is more than 10% of the amount on Form 1040, line 38.
Corrosive drywall losses.
If you paid for repairs to your personal residence or household appliances because of corrosive drywall, you may be able to deduct on line 20 those amounts paid. See Pub. 547 for details.
Use Schedule A, line 23, to deduct the costs of proving that you had a property loss. Examples of these costs are appraisal fees and photographs used to establish the amount of your loss.
You can deduct only the part of these expenses that exceeds 2% of the amount on Form 1040, line 38.
Pub. 529 discusses the types of expenses that can and cannot be deducted.
Legal expenses for personal matters that don't produce taxable income.
Lost or misplaced cash or property.
Expenses for meals during regular or extra work hours.
The cost of entertaining friends.
Commuting expenses. See Pub. 529 for the definition of commuting.
Travel expenses for employment away from home if that period of employment exceeds 1 year. See Pub. 529 for an exception for certain federal employees.
Travel as a form of education.
Expenses of attending a seminar, convention, or similar meeting unless it is related to your employment.
Expenses of adopting a child. But you may be able to take a credit for adoption expenses. See Form 8839 and its instructions for details.
Fines and penalties.
Expenses of producing tax-exempt income.
Enter the total ordinary and necessary job expenses you paid for which you weren't reimbursed. (Amounts your employer included in box 1 of your Form W-2 aren't considered reimbursements.)
An ordinary expense is one that is common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for your business. An expense doesn't have to be required to be considered necessary.
But you must fill in and attach Form 2106 if either (1) or (2), next, applies.
You claim any travel, transportation, meal, or entertainment expenses for your job.
Your employer paid you for any of your job expenses that you would otherwise report on line 21.
If you used your own vehicle, are using the standard mileage rate, and (2), earlier, doesn't apply, you may be able to file Form 2106-EZ instead.
If you don't have to file Form 2106 or 2106-EZ, list the type and amount of each expense on the dotted line next to line 21. If you need more space, attach a statement to your paper return showing the type and amount of each expense. Enter the total of all these expenses on line 21.
Don't include on line 21 any educator expenses you deducted on Form 1040, line 23.
Examples of other expenses to include on line 21 are:
Safety equipment, small tools, and supplies needed for your job.
Uniforms required by your employer that aren't suitable for ordinary wear.
Protective clothing required in your work, such as hard hats, safety shoes, and glasses.
Physical examinations required by your employer.
Dues to professional organizations and chambers of commerce.
Subscriptions to professional journals.
Fees to employment agencies and other costs to look for a new job in your present occupation, even if you don't get a new job.
Certain business use of part of your home. For details, including limits that apply, use TaxTopic 509 (see the Form 1040 instructions) or see Pub. 587.
Certain educational expenses. For details, use TaxTopic 513 (see the Form 1040 instructions) or see Pub. 970. Reduce your educational expenses by any tuition and fees deduction you claimed on Form 1040, line 34.
You may be able to take a credit for your educational expenses instead of a deduction. See Form 8863 for details.
Enter the total amount you paid to produce or collect taxable income and manage or protect property held for earning income. But don't include any personal expenses. List the type and amount of each expense on the dotted lines next to line 23. If you need more space, attach a statement to your paper return showing the type and amount of each expense. Enter one total on line 23.
Examples of expenses to include on line 23 are:
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 an insolvent or bankrupt financial institution. For details, including limits that apply, see Pub. 529.
Casualty and theft losses of property used in performing services as an employee from Form 4684, lines 32 and 38b, or Form 4797, line 18a.
Deduction for repayment of amounts under a claim of right if $3,000 or less.
Convenience fee charged by the card processor for paying your income tax (including estimated tax payments) by credit or debit card. The deduction is claimed for the year in which the fee was charged to your card.
Only the expenses listed next can be deducted on this line. List the type and amount of each expense on the dotted lines next to line 28. If you need more space, attach a statement to your paper return showing the type and amount of each expense. Enter one total on line 28.
Gambling losses (gambling losses include, but aren't limited to, the cost of non-winning bingo, lottery, and raffle tickets), but only to the extent of gambling winnings reported on Form 1040, line 21.
Casualty and theft losses of income-producing property from Form 4684, lines 32 and 38b, or Form 4797, line 18a.
Loss from other activities from Schedule K-1 (Form 1065-B), box 2.
Federal estate tax on income in respect of a decedent.
A deduction for amortizable bond premium (for example, a deduction allowed for a bond premium carryforward or a deduction for amortizable bond premium on bonds acquired before October 23, 1986).
An ordinary loss attributable to a contingent payment debt instrument or an inflation-indexed debt instrument (for example, a Treasury Inflation-Protected Security).
Deduction for repayment of amounts under a claim of right if over $3,000. See Pub. 525 for details.
Certain unrecovered investment in a pension.
Impairment-related work expenses of a disabled person.
For more details, see Pub. 529.
Use the Itemized Deductions Worksheet, to figure the amount to enter on line 29 if the amount on Form 1040, line 38, is over $311,300 if married filing jointly or qualifying widow(er); $285,350 if head of household; $259,400 if single; or $155,650 if married filing separately.
|1.||Enter the total of the amounts from Schedule A, lines 4, 9, 15, 19, 20, 27, and 28||1.|
|2.||Enter the total of the amount from Schedule A, lines 4, 14, and 20, plus any gambling and casualty or theft losses included on line 28||2.|
||Be sure your total gambling and casualty or theft losses are clearly identified on the dotted lines next to line 28.|
|3.||Is the amount on line 2 less than the amount on line 1?|
||Subtract line 2 from line 1||3.|
|4.||Multiply line 3 by 80% (0.80)||4.|
|5.||Enter the amount from Form 1040, line 38||5.|
|6.||Enter $311,300 if married filing jointly or qualifying widow(er); $285,350 if head of household; $259,400 if single; or $155,650 if married filing separately||6.|
|7.||Is the amount on line 6 less than the amount on line 5?|
||Subtract line 6 from line 5||7.|
|8.||Multiply line 7 by 3% (0.03)||8.|
|9.||Enter the smaller of line 4 or line 8||9.|
|10.||Total itemized deductions. Subtract line 9 from line 1. Enter the result here and on Schedule A, line 29||10.|
If you elect to itemize for state tax or other purposes even though your itemized deductions are less than your standard deduction, check the box on line 30.
2016 Optional State Sales Tax Tables
|At least||But less than||1||2||3||4||5||Over 5||1||2||3||4||5||Over 5||1||2||3||4||5||Over 5|
|Income||District of Columbia||4||5.7500%||Florida||1||6.0000%||Georgia||2||4.0000%|