Tax glossary

Itemized Deductions

Itemized Deductions — what it means, how it works, and a real example, explained without the jargon.

What is Itemized Deductions?

Itemized deductions are specific expenses the tax code lets you write off one by one, instead of taking the flat standard deduction. You itemize only when they add up to more than the standard amount.

How it works

You total them on Schedule A. The big categories are mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and medical expenses above 7.5% of your AGI. If that total tops your standard deduction, itemizing lowers your taxable income further.

A quick example

A homeowner with $9,000 of mortgage interest, $10,000 of state and local taxes, and $4,000 in donations has $23,000 in itemized deductions — well above the $15,000 single standard deduction, so itemizing saves the difference.

What people get wrong

The $10,000 SALT cap catches a lot of people in high-tax states — you can't deduct more than $10,000 of state income and property tax combined, no matter how much you actually paid.

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Frequently asked questions

What does Itemized Deductions mean?

Itemized deductions are specific expenses the tax code lets you write off one by one, instead of taking the flat standard deduction. You itemize only when they add up to more than the standard amount.

How does Itemized Deductions work?

You total them on Schedule A. The big categories are mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and medical expenses above 7.5% of your AGI. If that total tops your standard deduction, itemizing lowers your taxable income further.

What's the most common mistake with itemized deductions?

The $10,000 SALT cap catches a lot of people in high-tax states — you can't deduct more than $10,000 of state income and property tax combined, no matter how much you actually paid.