Making Itemized Deductions for 1040 Schedule A

A basic overview of itemized deductions and their limitations

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Itemized deductions refers to a group of tax deductions found on Form 1040 Schedule A. People can claim either the standard deduction or choose to itemize their deductions, line by line. In both cases, these deductions reduce the amount of income subject to federal income tax.

What does itemizing deductions mean?

Itemizing deductions means reporting actual expenses for various types of available deductions to claim against your tax liability.

This entails research as to what was spent during the year and what qualifies to be claimed as a deduction. This requires that you have documentation for all of your spending, such as bank statements, receipts, check stubs, property tax statements, acknowledgement letters for charitable gifts, and similar kinds of tax-related documents.

The Difference between Itemized Deductions and the Standard Deduction

Both the standard deduction and itemized deductions reduce a person's taxable income. People can choose to take either the standard deduction or the total of their itemized deductions. So it's important to realize this is an either/or choice.

The difference is that the standard deduction is a set amount based on a person's filing status, while the amount of itemized deductions is based on a person's actual spending on certain types of expenses. Because itemized deductions are based on actual expenses, a person needs to have documentation to prove that those expenses are legitimate if the IRS asks for proof.

When to Itemize Deductions

Generally speaking, people choose to itemize when the total of all their itemized deductions exceeds their standard deduction.

People can choose each year whether to itemize or to take the standard deduction. Some years you might itemize, some years you might not.

For example, suppose a single person has total itemized deductions of $6,500 in 2014.

For 2014, the standard deduction for a single person is $6,200. Since this person has itemized deductions that are greater than the standard deduction, this person will pay less federal income tax by choosing to itemize rather than taking the standard deduction. That's because this person's itemized deductions will reduce their taxable income by $6,500, while taking the standard deduction will reduce their taxable income by $6,200.

When a Person Must Itemize Deductions

Married couples filing separately must use the same method of claiming their deductions. Either both spouses must take the standard deduction, or both spouses must itemize. If one spouse chooses to itemize, the other spouse must also itemize, even if the other spouse's itemized deductions are less than the standard deduction. Also, be aware that spouses filing separate tax returns may need to divide jointly-paid deductions between their separate returns; see Publication 504 for details on how to divide deductions.

Non-resident aliens must itemize; they are not eligible to take the standard deduction.

For more details, see Nonresident Aliens - Figuring Your Tax on the IRS Web site.

What can be Itemized?

Limitations on Itemized Deductions

Itemized deductions are limited when a person's adjusted gross income exceeds a threshold amount, which varies by filing status. These limitations are sometimes referred to as the Pease limitations, named after Representative Donald Pease who authored the original legislation limiting itemized deductions back in 1990.

For 2016, Itemized Deductions Start to Phase Out Once AGI Reaches
Filing StatusAdjusted Gross Income Threshold
Married filing jointly and qualifying widow(er)$311,300
Married filing separately$155,650
Head of household$285,350


For 2015, Itemized Deductions Start to Phase Out Once AGI Reaches
Filing StatusAdjusted Gross Income Threshold
Married Filing Jointly and qualifying widow(er)$309,900
Married filing separately$154,950
Head of household$284,050

Once a person's adjusted gross income exceeds the relevant threshold amount, the total amount of itemized deductions is reduced by an amount. The reduction amount is the smaller of the following two figures:

  • 3% of the amount by which adjusted gross income exceeds the relevant threshold; or
  • 80% of itemized deductions except for medical expenses, investment interest, casualty or theft losses, and gambling losses.

This overall limitation on itemized deductions is applied after the limit on charitable gifts and after the 2% of adjusted gross income limit on miscellaneous deductions.

To calculate the limitation on itemized deductions, you can use the "Itemized Deductions Worksheet – Line 29" found on page A-13 of the Instructions for Schedule A (pdf).

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