Itemized Deduction

Definition

Itemized deductions are specific expenses allowed by the IRS that you can subtract from your adjusted gross income to reduce your taxable income, reported on Schedule A of Form 1040. Common itemized deductions include mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and certain medical expenses. You should itemize only when the total of your deductions exceeds the standard deduction for your filing status.