Probably everyone in the country knows what a Form 1040 is. It is the form used to file our Federal Income Taxes every year. We've all seen it and recognize that of all the paperwork you may have to deal with each year, the 1040 is more than likely one of the most important. For many people, filing is pretty straight forward. You declare your income, claim your deductions and calculate the difference. The bottom line tells you if you owe taxes and how much or if you can expect a refund. However, for others filing the form there might be a bit more paperwork to add to it. If you're planning on itemizing your deductions, you may need to add the Tax Form 1040 Schedule A to complete your return.
What Is a Schedule A?
When you file your taxes, you're generally automatically given a standard deduction you can claim. However, for some people, they find that if they choose to itemize their deductions they can get a greater break on their taxes. The Schedule A form is used to itemize each deduction you have on your taxes. This means that you can deduct even more things that may not be included in the standard deduction. These could include medical and dental expenses, unreimbursed employee business expenses, money you paid out in interest, voluntary donations, and even loss of property due to theft or damage. If you want to know more about the kind of deductions you can itemize on your Tax Form 1040 Schedule A you can refer to the Schedule A instructions that will come with your forms.
If you've been using the Schedule A every year, then it's important that you familiarize yourself with the new changes for the current tax season. There is now a limit on itemized deductions that can be claimed for any taxpayer claiming an Adjusted Gross Income over $154,950; the new standard mileage rate for operating a car when it is used for a medical purpose is 23/mile or 57.5/mile if it's used for business purposes. You will also find a health coverage tax credit you can now claim on Form 8885 that is retroactive to January 1, 2014.
Suffice it to say there are many more changes in the Tax Form 1040 Schedule A that you need to familiarize yourself with before filing your taxes. These include changes in personal property taxes, the amount itemized for a deceased person, how to deduct interest payments, and how to claim credit for paying a foreign tax if you've lived out of the country. The Schedule A is the most important addition to your Tax Form 1040 when you want to itemize deductions. Many people have learned that by making good use of it, they have made a considerable dent in their tax liability that could easily pay off in the end. If you want to get the most you can get out of your filing this year, it may be worth your while for you to use the new Schedule A and learn how to utilize it to your best advantage.