Itemized Deductions

Who Files Schedule A

Taxpayers whose total itemized deductions exceed the standard deduction for their filing status. After the TCJA roughly doubled the standard deduction, most filers no longer itemize. Itemizing typically benefits homeowners with significant mortgages, residents of high-tax states, and households making large charitable gifts. Itemize on Schedule A or take the standard deduction, never both.

What Schedule A Reports

Schedule A breaks itemized deductions into categories: medical and dental expenses above 7.5 percent of AGI; state and local income, sales, and property taxes (capped under SALT at $10,000 under TCJA, raised under OBBBA); home mortgage interest and points (subject to acquisition indebtedness limits); gifts to charity (cash subject to 60 percent of AGI, appreciated long-term assets at 30 percent); casualty and theft losses limited to federally declared disasters since TCJA; and other deductions (gambling losses up to gambling winnings, certain unrecovered investment in annuities).

Key Deadlines

• April 15: filed with Form 1040 (or next business day if it falls on a weekend or holiday)
• October 15: extended deadline if Form 4868 was timely filed

Common Mistakes

• Itemizing when the standard deduction would have produced a lower tax. Always run both calculations.
• Missing charitable contribution substantiation: gifts of $250 or more require a written acknowledgment from the charity before the return is filed.
• Claiming SALT above the cap. The cap is dollar-for-dollar regardless of state and local tax actually paid.
• Deducting medical premiums already paid pre-tax through an employer plan (they are already excluded from W-2 Box 1 and cannot be itemized again).
• Deducting personal mortgage interest on a refinance where the cash-out portion was used for personal expenses. Only acquisition indebtedness qualifies.

Best Practices

• Run a side-by-side calculation of itemized vs standard each year. The breakeven moves with SALT cap changes, mortgage paydown, and charitable giving rhythm.
• Bunch charitable contributions into a donor-advised fund every other year so you exceed the standard deduction in the giving year and take the standard in the off year.
• Keep a running spreadsheet of medical expenses through the year. The 7.5 percent of AGI floor is easy to miss until you total receipts at year end.
• Track mortgage interest from Form 1098 against the acquisition indebtedness limit ($750,000 post-2017, $1 million pre-2017 grandfathered). Multiple mortgages aggregate.
• For appreciated stock or crypto donations, document fair market value at the date of transfer. Long-term holdings deduct at FMV without recognizing capital gain.

Source: Official Schedule A information at IRS.gov