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Our Biggest Income Tax Deductions

Written by nickel - 12 Comments

About two weeks ago I sat down with Turbo Tax and did a quick run-through to see roughly where we stand with regard to income taxes. While I’ve written previously about common income tax deductions, as well commonly missed income tax deductions, today I though I’d share our biggest income tax deductions.

1. Charitable contributions (cash)
2. Mortgage interest
3. State income taxes
4. Property taxes
5. Charitable contributions (non-cash)

Note: I didn’t include retirement contributions because those are technically “adjustments.”

Given that we just refinanced our mortgage, I expect our mortgage interest deduction to be much less significant next year, but our other deductions will likely hold steady or increase.

What about you? What are your top income tax deductions?

Published on February 15th, 2008 - 12 Comments
Filed under: Taxes
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Comments (scroll down to add your own):

Ours were similar, just in a different order:

1. Mortgage Interest (combined)
2. Charitable Giving (cash)
3. Property Tax
4. State Income Tax Withholding
5. Charitable Giving (non-cash)

(I actually posted my preliminary tax numbers on my blog.)

This year we had far fewer things to give away than in years past… I think we’ve given away just about everything non-cash that we can without pulling things we currently use.
Comment by That One Caveman — Feb 15th 2008 @ 9:37 am
Ours were:

1. Cash charitable contributions
2. Mortgage interest
3. Property Tax
4. State and local sales tax (I’m in Texas, so no income tax here)
5. Non-cash charitable contributions
Comment by BillyOceansEleven — Feb 15th 2008 @ 9:51 am
Ours were similar.

1 - Mortgage interest (due to having two homes for part of the year)

2 - Charitable contributions (cash)

3/4 - State taxes/Property tax (don’t recall the exact numbers off the top of my head but they are close to equal)
Comment by savvy — Feb 15th 2008 @ 10:09 am
Similar, but my real estate taxes are higher than my mortgage interest because I’m approaching the end of my mortgage.

Interestingly, without the charitable contributions, I’d be taking the standard deduction. Similarly, without the mortgage interest (if my house were paid off), I’d be taking the standard deduction.

I also got to take residental energy credits this year, which saved me more taxes than any of the above (though not more than all of the above).
Comment by Debbie M — Feb 15th 2008 @ 10:44 am
We live in Westchester County New York so property tax (#1) and mortgage interest (close #2) blow away any other deductions. Non-cash and cash charitable contributions are pretty close for #3 and #4.
Comment by CF — Feb 15th 2008 @ 10:48 am
Standard deduction.
Comment by Kurt — Feb 15th 2008 @ 11:25 am
1. Mortgage interest (second year of 30-year mortgage)
2. Property taxes
3. Charitable donation (cash)
4. Charitable donation (noncash)

My charitable donations increased from the year before, but I see I have far to go.
Comment by Frugal pursuit — Feb 15th 2008 @ 12:05 pm
CF, I also live in Westchester. I have no mortgage, so mine are State income taxes, property taxes, charitable contributions (cash), charitable contributions (non-cash).
Comment by kitty — Feb 15th 2008 @ 12:39 pm
“We live in Westchester County New York so property tax (#1) and mortgage interest (close #2) blow away any other deductions”

“CF, I also live in Westchester”

..ex-Mount Kisco-ite here.

Thank goodness no more “never saw a tax they didn’t like’ NY. Visiting is so much nicer than living there. Still love NY/NYS/NYC despite it all.
Comment by Ria Rhodes — Feb 15th 2008 @ 1:52 pm
Our top 5 were”

1. Mortgage interest
2. Medical expenses
This has been 1 or 2 for three years
It probably will be for 2008 & 2009 too
3. State taxes
4. Property taxes
5. Charity
Comment by Ron@TheWisdomJournal — Feb 15th 2008 @ 10:51 pm
” “never saw a tax they didn’t like’ NY”
LOL - love this line. I am in Mt Kisco, btw. The town is in constant need of money to do whatever they want to waste money on. Like remodeling the area round the train station and puting a 50K clock there, after all it is “the face of the town”. Like Mt Kisco is a tourist attraction or the tired commuters with NYC really care.
Comment by kitty — Feb 16th 2008 @ 9:01 pm
ours is charitable contributions… and it is good to see that so many other people have that as a decent sized deduction. I am a firm believer that what goes around comes around. I have seen it happen in my life very often…
Comment by ChristianPF — Feb 19th 2008 @ 1:07 pm