Itemized deductions are costs that the federal government allows taxpayers to “write off” of their tax return to lower their tax bill.
Examples of possible itemized deductions are:
- unreimbursed medical and dental expenses (must exceed 7.5% of Adjusted Gross Income (AGI))
- interest expenses (home mortgage interest, home equity line of credit (HELOC) interest)
- taxes paid (personal property tax, state income tax, and local income tax)
- charitable donations
- casualty and theft losses
- unreimbursed job-related expenses
- other miscellaneous deductions
Pro Tip: If your itemized deductions won’t exceed your standard deduction, don’t bother gathering the documents and adding the amounts up; just take the standard deduction.
