Itemized tax deductions are subtractions from an individual taxpayer’s adjusted gross income (AGI). Generally, individual taxpayers may claim either the standard deduction or their itemized deductions. 

Taxpayers report itemized deductions on Schedule A (Itemized Deductions) with their annual Form 1040. Taxpayers can find a list of eligible itemized deductions in Subchapter B Parts VI and VII of the Internal Revenue Code (IRC).

Itemized deductions generally include amounts paid for the following expenses:

  • Unreimbursed medical and dental expenses to the extent they exceed 7.5% of the taxpayer’s AGI.1
  • State income taxes, real property taxes, ad-valorem taxes on personal property, and sales taxes. The tax deduction is limited to $10,000 per tax return ($5,000 if married filing separately) for tax years 2018 through 2025.2 Congress may renew the cap on state and local taxes in the future. 
  • Interest expense on a qualified residence for the taxpayer (i.e., home mortgage interest) and investment interest expense calculated on Form 4952 (Investment Interest Expense Deduction).
  • Charitable contributions made to Section 501(c)(3) organization. Taxpayers can deduct cash and noncash charitable contributions subject to specific rules and AGI limitations. Cash contributions to public charities are generally deductible up to 50% of AGI (60% AGI limitation applies for years 2018 through 2025)3.
  • Casualty and theft losses on Form 4684 (Casualties and Thefts). For tax years 2018 through 2025, taxpayers can only deduct the casualty or theft loss on personal-use property if the loss is attributable to a federally declared disaster area.4 

Example Fact Pattern – Itemized Deductions on Schedule A

John Taxpayer, a Georgia resident, is a single filing taxpayer with no dependents. John’s AGI for the 2023 tax year is $75,000. John’s standard deduction for 2023 is $13,850. John has the following eligible itemized deductions:

  • Unreimbursed medical expenses: $4,000
  • State income taxes paid: $4,750
  • Principal residence property taxes: $3,100 (ad-valorem portion only)
  • Home mortgage interest paid: $7,000
  • Cash donation to St Jude’s Hospital: $500

John calculates his itemized tax deductions as follows:

  • Medical expenses are only deductible if they exceed 7.5% of AGI. John’s floor is $5,625 (7.5% times $75,000). Because his unreimbursed expenses are $4,000 and below the $5,625 figure, there is no deduction for medical expenses.
  • State income taxes and real property taxes total $7,850. The full amount is deductible because it falls below $10,000.
  • John purchased his house in 2020 and the average mortgage balance during 2023 was $250,000. John’s home mortgage interest of $7,000 is fully deductible because his average home mortgage balance falls below the $750,000 phaseout.
  • The charitable cash donation of $500 is fully deductible because the contribution is made to a public charity and the amount falls below 60% of John’s AGI.

John’s total itemized deductions on Schedule A amounts to $15,350 (4,750 + 3,100 + 7,000 + 500). John’s itemized deductions exceed his standard deduction of $13,850, so he should claim the itemized deductions for the greatest tax benefit.

More Information

Taxpayers can find more information about itemized tax deductions in IRS Publication 17 (Your Federal Income Tax Return) and the IRS website.

  1. IRC Section 213(a) ↩︎
  2. IRC Section 164(b)(6)(B) ↩︎
  3. IRC Section 170(b)(1)(G)(i) ↩︎
  4. IRC Section 165(h)(5)(A) ↩︎