Itemized deductions can reduce your taxable income, lowering the amount of tax you owe. However, they require careful tracking of your eligible expenses and are often more complex to claim than the standard deduction. In this article, we’ll explore what itemized deductions are, which expenses qualify, and how to claim them on your tax return.

What Are Itemized Deductions?

澳洲幸运5官方开奖结果体彩网:Itemizing deductions allow taxpayers to subtract certain expenses from their 澳洲幸运5官方开奖结果体彩网:Adjusted Gross Income (AGI), reducing their taxable income. Unlike the standard deduction, which is a flat amount based on filing status, itemizing lets you deduct specific expenses if they ꦇexceed the standard deduction amount.

Common itemized deductions include:

• Mortgage interest
• State and local income taxes
• Medical or dental expenses
• Charitable donations

Each taxpayer must choose between claiming the standard deduction or itemizing. The standard deduction is a preset amount that varies according to the taxpayer's 澳洲幸运5官方开奖结果体彩网:filing status. The decision depends on which option results in a lower 澳洲幸运5官方开奖结果体彩网:taxable income.

Standard vs. Itemized Deductions

The 澳洲幸运5官方开奖结果体彩网:Tax Cuts and Jobs Act (TCJA), passed in 2017, changed business and personal taxes, leading to a higher standard deduction and fewer taxpayers itemizing. Before the passage of TCJA, taxpayers claimed a larger deduction on their tax returns by itemizing. For tax years 2018 through 2025, the increased standard deduction means fewer people will benefit from itemizing, as the standard deduction is now often higher than the sum of most people's itemized deductions.

With the tax changes, individuals must decide whether to itemize or claim the standard deduction, as some rules affect what can be itemized. The new law also eliminated deductions taxpayers could take previously and changed some others. The 澳洲幸运5官方开奖结果体彩网:personal exemption disappeared with the TCJA, but the 澳洲幸运5官方开奖结果体彩网:child tax credit doubled and applied to more families. 

Common Types of Itemized Deductions

Itemized deductions are below-the-line deductions from adjusted gross income (AGI). They are computed on the Internal Revenue Service’s Schedule A, and the total is carried over to the 澳洲幸运5官方开奖结果体彩网:1040 form. When itemized deductions have been subtracted, the remainder is the actual taxable income.

• Unreimbursed Medical and Dental Expenses: You can deduct medical and dental expenses that exceed 7.5% of your AGI. This includes expenses for yourself, your spouse, and your dependents. These deductions apply only to 澳洲幸运5官方开奖结果体彩网:out-of-pocket costs not covered by insurance.
• Long-term Care Premiums: If you have long-term care insurance, you may be able to deduct premiums if they exceed 10% of your AGI. There are limits based on age, and the insurance must meet IRS qualifications.
  
• Home Mortgage Interest: You can deduct 澳洲幸运5官方开奖结果体彩网:mortgage interest on the first $750,000 of debt for a primary or secondary home. If the mortgage originated before Dec. 16, 2017, a higher limitation of $1 million applies. Taxpayers who bought or refinanced homes during the year can also deduct the points they’ve paid within certain guidelines. You'll receive a 澳洲幸运5官方开奖结果体彩网:Form 1098 from your lender, showing the amount of interest paid.
  
• State and Local Taxes (SALT): Taxpayers who itemize can deduct two types of taxes paid on their Schedule A. 澳洲幸运5官方开奖结果体彩网:Personal property taxes, which include real estate taxes, are deductible along with 澳洲幸运5官方开奖结果体彩网:state and local taxes assessed for the previous year. Any refund received by the taxpayer from the state in the previous year must be counted as income if the taxpayer itemized deductions in the previous year. Until 2025, taxpayers can deduct only $10,000 of these combined taxes. In addition, foreign real estate taxes are not tax deductible.
• Charitable Donations: Donations made to qualified charities are 澳洲幸运5官方开奖结果体彩网:deductible. The limit on charitable contributions is typically 60% of your AGI, but this varies depending on the type of donation and the recipient organization. If you donate more than the limit, the excess can often be carried over to future years. 
• Casualty and Theft Loss: Losses resulting from federally declared disasters may be deductible, but only if the loss exceeds 10% of your AGI after subtracting a $100 threshold. If you receive reimbursement for the loss in a later year, that reimbursement must be reported as income.
• Miscellaneous Deductions: This category of itemized deductions includes items such as gambling losses to the extent of gambling winnings, losses from 澳洲幸运5官方开奖结果体彩网:partnerships or subchapter S corporations, estate taxes on 澳洲幸运5官方开奖结果体彩网:income in respect of a decedent (IRD), and specific other expenses.

How to Claim Itemized Deductions

Taxpayers should gather relevant information on their expenses and compare the amount they may itemize against their potential standard deduction. The standard deduction amounts by filing status for 2024 and 2025 are below.

If your itemized deductions exceed the standard deduction for your filing status, you can itemize them on Schedule A. The total will be transferred to Form 1040 and subtracted from your AGI to determine your taxable income.

The Bottom Line

Itemizing deductions can offer significant tax savings, but it requires careful documentation and an understanding of the rules. If you’re unsure whether itemizing is the right choice, it’s a good ide𝕴a to consult a tax professional who can help you navigate the process. The IRS also offers helpful resources on its to guide you🀅 through the tax filing process.