Itemized deductions are expenses that you can deduct from your taxable income for a given year. There are several types, including itemized deductions for unreimbursed medical expenses and mortgage interest payments. Each type of deduction has its own set of qualification rules and other variables set by the IRS.
However, if you’re itemizing specific deductions, you can’t claim the standard deduction. This is a flat dollar amount that you can deduct from your taxable income. And thanks to the Tax Cuts and Jobs Act (TCJA), the standard deduction has nearly doubled.
For tax year 2024, (taxes you file in 2025), the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. So if you can claim itemized deductions that total more than this amount, it will make sense to itemize deductions instead of claiming the standard deduction.
There are several kinds of itemized deductions you may be able to claim. Let’s take a look at some of the most common ones.
Mortgage Interest Deduction
The mortgage interest deduction allows you to deduct from your taxable income the amount you paid in interest on your mortgage for a given tax year. For 2024, you can deduct interest paid on up to the first $750,000 of mortgage debt for either your main or second home. If you’re married but file separately, the cap lowers to the first $375,000. For homes purchased before Dec. 16, 2017, the limit is higher, at $1 million, or $500,000 if you’re married but file separately.Property Tax Deduction
If you own real estate, you can deduct the state and local property tax you pay on it. But the deduction is capped at $10,000 per year. ($5,000 if you’re married and filing separately.)Your property tax bill might include other charges, such as special assessments for community improvements, or fees for services like trash collection, that are non-deductible. Charges like trash removal can be deducted for rental or business properties, but not for your personal residence.
Deductions for Medical Expenses
You may be able to deduct a specific percentage of unreimbursed out-of-pocket medical and dental expenses you’ve paid throughout the year. The IRS allows you to deduct only the part of your unreimbursed medical expenses that exceeds 7.5 percent of adjusted gross income (AGI).But the scope of deductible services is wide. You can deduct the following:
- Preventative care
- Surgeries
- Dental and vision services
- Glasses, contacts
- Hearing aids
- False teeth
- Prescription drugs
- Psychologist and psychiatrist visits
Charitable Contribution Deduction
If you donate to an IRS-approved charity or non-profit, you’re allowed to deduct those contributions up to a certain percentage of your AGI—typically 20 percent to 60 percent, depending on the type of charity.
These deductions apply only to charities with a 501(c)(3) status. You can look up their status using this tool.
However, the net for qualifying charities is rather wide. These include the following.
- Religious organizations
- Nonprofit educational charities
- Volunteer fire departments
- Nonprofit health care organizations
How to Claim Itemized Deductions
You may be required to do some extra paperwork if you plan to itemize deductions. For example, you will need to report these deductions on Schedule A in addition to your Form 1040.Working with a qualified tax professional or reliable tax filing software can help you identify and claim the itemized deductions that apply to you.
The Bottom Line
If you can claim itemized deductions that add up to more than the standard deduction, it may be wise to take that route. There are several types of expenses that you can deduct from your taxable income for a given year to reduce your tax bill. You can deduct certain medical expenses, mortgage interest payments, property taxes, and more.But it is important to understand how these deductions work, as there are specific rules for each one. In order to claim them, you will need to fill out Schedule A with your tax return. It may be best to work with a tax professional when itemizing deductions, to make sure you follow IRS rules and make the most of these tax benefits.
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