Certain expenditures qualify as a deduction for your taxes. These expenditures are referred to as itemized deductions.
In general, if your total itemized deductions exceed the standard deduction, you should itemize. This includes these situations:
- You do not qualify for the standard deduction, or the amount of the standard deduction is limited
- You have large, uninsured medical and dental expenses
- You pay interest and taxes on a home or personal property
- You have large, unreimbursed employee business expenses
- You have large, uninsured casualty or theft losses
- You make large contributions to qualified charities
Most deductions are subject to the 2% of adjusted gross income (AGI) rule. This means the sum of expenditures greater than 2% of your total AGI are deductible in the amount that exceeds the 2%. Medical and dental expenses that are greater than 7.5% of your total AGI are deductible in the amount that exceeds the 7.5%.
- Medical and dental expenses
- State and local income taxes or sales tax
- Real estate and personal property taxes
- Home mortgage and investment interest
- Home mortgage points
- Charitable contributions
- Casualty and theft losses
- Job expenses
- Miscellaneous deductions
Individuals Who Must Itemize
- A married person whose filing status is married filing separately and whose spouse is itemizing deductions.
- An individual who is a nonresident alien or dual-status alien during any part of the current tax year. Dual status occurs when you are considered both a nonresident and resident alien during the same year.
- An individual who changes his or her annual accounting cycle and is filing a return for a period of less than 12 months.
For more information, see the Instructions for Schedule A.