The total amount of itemized deductions you’re required to have before you can claim the deduction depends primarily on the standard deduction for your filing status. When you file your federal tax return, in most cases you can choose to take a standard deduction or claim itemized deductions. Since either deduction is used to decrease your taxable income, select the larger of the two.
Your standard deduction is a flat amount the Internal Revenue Service gives you based on your filing status for the tax year. The standard deduction is automatically given to each taxpayer, so if you do not claim itemized deductions, you’ll still receive the standard amount. As of 2010, the standard deduction for a single taxpayer is $5,700; for head of household $8,400; for married filing jointly $11,400; and for married filing separately $5,700. If your itemized deductions equal more than the standard amount, you will want to itemize.
Types of Itemized Deductions
Itemized deductions include items from many expense categories, but the most common deductions are for mortgage interest, state income or sales tax, real estate tax and charitable contributions. Out-of-pocket medical expenses are also an itemized deduction, but you can only deduct the medical expense that exceeds 7.5 percent of your adjusted gross income.
Miscellaneous itemized deductions are subject to a 2 percent limitation, which means you can take a deduction for expenses in this category that exceed 2 percent of your adjusted gross income. Deductions subject to this limitation include items such as unreimbursed employee expenses, legal fees and tax preparation fees.
Married Filing Separately
If your filing status is married filing separately, one spouse may claim itemized deductions on his income tax return, but the other spouse receives no deduction on her income tax return. This is because the spouse claiming the itemized deductions already claims all the eligible household itemized expenses. If your status is married filing separately and neither spouse claims itemized deductions, both parties can claim the standard deduction amount for the filing status.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.