When it comes to tax return preparation, maximizing itemized deductions is one of the biggest challenges. After all, no one wants to leave money on the table by overlooking various expenses that they could've written off. If you’ll be itemizing this year, here are a few ways to ensure you account for all applicable deductions. 

How to Maximize Your Tax Deductions 

1. Bundle Medical Expenses 

For the 2019 tax year, you may deduct out-of-pocket medical expenses that exceed 7.5% of your adjusted gross income (AGI). If your AGI was $50,000, for example, and you spent $5,000 on preventive screenings, necessary treatments, dental work, or vision care, you could deduct $1,250. Only expenses exceeding 7.5% of $50,000, or $3,750, are deductible, which leaves $1,250. For the 2020 tax year, this limit will increase to 10%. If by the end of the year you’re just under the limit for deducting medical expenses, arranging for a costly screening or procedure that you’ve been putting off may make sense because it could be deductible. 

2. Keep Detailed Records 

If you’ve avoided taking certain allowable deductions in the past for fear of being audited, the solution is to keep detailed records. If you work from home, for example, but have never claimed your office because you’ve heard it’s a red flag for the IRS, don't worry. The IRS audits roughly 0.5% of all returns. The chance that they’ll take a closer look at your return is slim. Should you happen to be audited anyway, providing detailed records for all your deductions will streamline the process and protect you financially. 

3. Consult a Tax Professional 

Did you know taxpayers can deduct state income tax or sales tax? Other surprising deductions—with certain restrictions—include health insurance premiums, higher education expenses, and job-hunting costs. By turning to an accountant who specializes in tax return preparation, you won't overlook any applicable expenses. After evaluating your situation, a seasoned CPA will ensure you maximize deductions. Depending on the circumstances, your accountant may be able to help you implement strategies for maximizing the following year’s deductions, as well. 

For help with your tax return preparation, turn to Roy E. Carter, CPA, PC in Staunton, VA. This full-service accounting firm has been helping individuals and businesses manage their finances since 1988. In addition to tax return preparation, they assist with bookkeeping, payroll, business consulting, IRS representation, and financial planning. To learn more about their commitment to providing unparalleled service, visit their website. To schedule an appointment, call (540) 886-6251.