What is Itemized Deductions?
Definition Itemized deductions are specific expenses the tax law allows you to subtract from income, claimed on Schedule A instead of the standard deduction. Common examples include mortgage interest, state and local taxes up to the cap, charitable gifts, and medical costs above a percentage of income. You itemize only when these total more than your standard deduction.
Tracking deductible expenses and timing them, sometimes bunching them into one year, can push a client over the standard deduction and unlock real savings.