How to Itemize Your Deductions

by Kaye Morris ; Updated July 27, 2017

The Internal Revenue Service (IRS) offers a standard deduction to tax filers based on the filing status used on the return, but if you have expenses during the tax year that qualify as itemized deductions, you may receive a larger tax break by itemizing deductions rather than taking the standard deduction. Itemized deductions are listed on Form 1040 Schedule A and are filed along with your Form 1040. The IRS provides individual rules, regulations and eligibility requirements governing each type of itemized deduction, so make sure you are eligible for and completely understand the deduction before you include it on Schedule A.

Step 1

Enter your unreimbursed medical expenses in the first section of Schedule A. Only the amount of medical expenses that is greater than 7.5 percent of your adjusted gross income is allowable as a deduction.

Step 2

List the amounts of state and local tax paid, real estate tax paid, vehicle tax paid and other allowable tax paid in the Taxes You Paid section of Schedule A. The state and local tax line item gives you an opportunity to claim either state income tax paid or general sales tax paid.

Step 3

Enter home mortgage interest, points paid on mortgage loans, mortgage insurance premiums and investment interest in the Interest You Paid section of Schedule A.

Step 4

List all charitable contributions in the Gifts to Charity section of Schedule A. If you made an individual cash gift of over $250, you must complete Form 8283, which provides more detail for the charitable contributions, and include it with your tax return. You do not need to complete Form 8283 if you have made multiple gifts to the same entity that total more than $250.

Step 5

Enter casualty or theft losses in the Casualty and Theft Losses section of Schedule A. You must also complete and include Form 4684 in order to claim an itemized deduction for a casualty or theft loss. Form 4684 will provide a detail of the circumstances creating the loss as well as the specific property lost and a value for that property.

Step 6

Enter unreimbursed employee expenses, tax preparation fees, safe deposit box fees and other qualifying fees in the Job Expenses and Certain Miscellaneous Deductions section of Schedule A. Unreimbursed employee expenses may include items such as the tools used by a mechanic that are not provided by his employer or union dues.

Step 7

Enter payments made to produce or collect taxable income or to protect income-producing property in the Other Miscellaneous Deductions section of Schedule A. Expenses in this category might include accounting and legal fees.

Step 8

Perform all the necessary calculations for each section of Schedule A.

Step 9

Total the allowable itemized deductions from each subsection, and enter the total at the bottom of Schedule A in the Total Itemized Deductions section. If the itemized deduction is larger than the standard deduction, use the itemized deduction total on Form 1040.

Tips

  • If you are not certain how to prepare Schedule A or whether you are eligible for certain itemized deductions, consider hiring a tax professional to assist you with your tax filing.

Warnings

  • If your adjusted gross income is over the IRS directed amount for the filing year, your itemized deduction may be limited.

About the Author

Kaye Morris has over four years of technical writing experience as a curriculum design specialist and is a published fiction author. She has over 20 years of real estate development experience and received her Bachelor of Science in accounting from McNeese State University along with minors in programming and English.