Itemized Tax Deductions
Most taxpayers can either take itemized tax deductions or they can take the standard tax deductions. Usually a taxpayer may calculate both the itemized tax deductions and the standard tax deductions and then compare the two. If the itemized tax deductions amount to more than the standard tax deductions, then the taxpayer will claim itemized tax deductions. However, itemizing and claiming itemized tax deductions is more complicated than taking the standard tax deductions.
Below are typical itemized deductions. There are personal itemized tax deductions and also business itemized tax deductions. Here, we discuss personal itemized tax deductions. For each type of itemized tax deduction, you have to figure out what kinds of expenses qualify as itemized deductions for that category.
Where to claim personal itemized tax deductions?
The personal itemized tax deductions are claimed on Schedule A which is filed along with the IRS tax form 1040. Personal itemized tax deductions can only be claimed on the IRS tax form 1040.
When should I itemize expenses vs taking standard tax deductions?
The most common reasons for itemized tax deductions is home ownership. Since mortgage interest and real estate taxes are tax deductible, itemizing these items usually result in large tax deductions, larger than the standard tax deductions allowed. If someone does not own a home or any real estate, then it is unlikely that they will have enough itemized tax deductible expenses to exceed the standard deductions allowed.