What is an Itemized Deduction?

Filing income taxes can be one of the most confusing things you will ever do, and one decision you must make is choosing itemized deductions or the standard deduction. The standard deduction is just a set amount that anyone who qualifies can deduct. An itemized deduction allows you to deduct more off of your taxable income for qualifying expenses. 

How They Work

When dealing with itemized deductions, it is usually best to have the help of a tax professional. They will provide you with a list of possible deductions that you can take from your income. If any of the items on the list apply to you, you would be able to reduce your taxable income, thereby reducing the amount of taxes that you will have to pay. 

Common Deductions

There are many things that you can deduct from your taxable income if you choose to itemize. Here are a few of the more common deductions.

• Medical expenses- You can deduct any medical expenses that are over 7.5% of your adjusted gross income.
  
  
• Charitable donations- Any donations to a qualified organization such as a church or charity.
  
  
• State and local taxes- Any other taxes that you pay besides federal can be deducted.
  
  
• Mortgage interest- The amount of interest that you pay on your mortgage can be deducted from your taxable income.