Itemized deductions refer to certain deductions on an individual's income tax return. Itemized deductions are subtracted from your adjusted gross income, reducing your tax bill. Report itemized deductions on Schedule A of Form 1040.
To itemize deductions, your total itemized deductions must be greater than the standard deduction, which varies based on your filing status. You may be eligible for an increased standard deduction if you are blind, over age 65 or paid certain taxes. The Internal Revenue Service indexes the standard deduction amount for inflation.
Common Itemized Deductions
Common itemized deductions include medical and dental expenses, state income taxes, real estate and personal property taxes, mortgage interest, charitable contributions and unreimbursed employee business expenses.
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Some taxpayers may have limited itemized deductions. If you have an adjusted gross income greater than $166,800, for married persons filing jointly, or $83,400, for married persons filing separately, the limitations will apply to you in 2010. Like the standard deduction, this threshold is indexed for inflation. If your status is married filing separately and your spouse itemizes deductions, then you must itemize, even if your total itemized deductions do not exceed your standard deduction.