Don’t Miss These Deductions!

Many people can not itemize their deductions on the federal income tax return because the standard deduction is just so high that it is often better than itemizing.  However, in Alabama it takes a lot less to itemize because the standard deduction is lower and FICA taxes (Social security and Medicare) are deductible as itemized deductions for Alabama purposes.  This means that income alone may be enough to create itemized deductions for state purposes.  That is where I see many people be a little lazy.

There are several deductions that most people have and they are good deductions if you are having to itemize anyway.  Car Tag Tax, Real Estate Tax, Charitable Contributions, and Mortgage Interest are all deductible expenses that have no AGI limits.  That makes them pound for pound equal.  The only big deal about mortgage interest is that it is typically much large than the others.  What I often see is people itemize on state just because of their FICA tax but they forget their car tags, property taxes, or contributions and when we mention it they just say oh don’t worry about it.  I get that a little.  They have come down, waited to get their taxes filed and now they don’t want to wait to go dig up that stuff.  But, if those things totaled to $1,000 (not uncommon) that is a $50 bill their throwing away.  I bet they would say something if my bill went up $50.

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