Itemized Deductions - you are allowed to subtract either a standard deduction or the total of your itemized deductions, whichever is greater, from your adjusted gross income. Using Itemized deductions is generally preferable if you own your own home, live in a high tax state or town, or have large medical bills.
Some itemized deductions are subject to special rules including phase-out. If adjusted gross income exceeds $100,000 (single, joint, head-of-household, widow) or $50,000 (married you or spouse), itemized deductions can be reduced as much as 80%. These phase-outs are automatically calculated for you.
In 1992:
Medical & Dental - only expenses exceeding 7.5% of your Adjusted Gross Income are deductible.
Investment Interest - enter allowable investment interest. You may deduct interest on debt incurred in margin accounts but only for amounts up to or equaling net investment income, which is the excess of investment income over investment expenses (not including interest). This estimator does not calculate net investment income nor does it compare it to the total investment interest to calculate the allowable investment interest.
For example, if your net investment income is $30,000 and your margin interest expenses are $45,000, your deductibles work like this: you may deduct 100% of the first $30,000 of margin interest, plus 0% of the next $10,000.
Casualty/Theft - first $100 is not deductible and then only in excess of 10% of Adjusted Gross Income.
Miscellaneous - only expenses exceeding 2% of your Adjusted Gross Income are allowed.
Note: total deductions shown at the bottom of the worksheet reflects any phase-outs if applicable.
