Itemized Deductions
Individual deductions claimed on Schedule A instead of the standard deduction.
Itemized deductions are specific expenses you list on Schedule A of your tax return instead of taking the standard deduction. Common itemized deductions include state and local taxes (SALT, capped at $10,000), mortgage interest, charitable contributions, and medical expenses exceeding 7.5% of AGI. You should itemize only when your total exceeds the standard deduction.
Example
A homeowner with $12,000 in mortgage interest, $10,000 in SALT, and $5,000 in charitable donations itemizes $27,000 instead of taking the $14,600 standard deduction.
Why It Matters for Your Business
Choosing between itemizing and the standard deduction can save you thousands—always calculate both to determine which gives you the larger tax benefit.
Related Terms
More Taxes Terms
Adjusted Gross Income
Gross income minus specific deductions like retirement contributions.
Tax Audit
An examination of tax returns by the IRS to verify accuracy.
Capital Gains
Profit from selling an asset for more than its purchase price.
Capital Loss
Loss from selling an asset for less than its purchase price.
Tax Deduction
An expense that reduces taxable income.
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