what are itemized deductions

Itemized deductions are specific expenses that taxpayers can claim on their federal income tax returns to decrease their taxable income. Taxpayers can choose to itemize deductions instead of taking the standard deduction if available. Itemized deductions include a range of expenses that are only deductible when you choose to itemize, such as mortgage interest, state and local income or sales taxes, property taxes, medical and dental expenses that exceed 7.5% of your adjusted gross income, and charitable donations. Taxpayers must file their income taxes using Form 1040 and list their itemized deductions on Schedule A. Deductions are reported in the tax year in which the eligible expenses were paid. Taxpayers should add up their itemized deductions to make sure their itemized deductions total is greater than the standard deduction amount for their filing status. If the amounts of the itemized deductions and the standard deduction do not differ much, the taxpayer may take the standard deduction to reduce the possibility of adjustment by the Internal Revenue Service (IRS).