Itemized deductions let you subtract specific household and personal expenses from your taxable income instead of taking a single flat deduction

When you file taxes, you get to reduce your taxable income in one of two ways: take the standard deduction (a fixed dollar amount that changes each year based on your filing status), or itemize deductions (add up individual expenses you paid during the year and deduct that total instead). Itemizing makes sense only if your expenses add up to more than the standard deduction. If they do, you subtract the larger number and pay tax on less income.

The IRS publishes which expenses you can itemize. Common ones include mortgage interest, property taxes, charitable donations, and medical costs above a certain threshold. You keep receipts and records throughout the year, then list them on Schedule A when you file. Most people use the standard deduction because it is simpler and often larger, but roughly one in ten filers itemize because their specific situation—high property taxes, large charitable giving, significant medical bills—makes it worthwhile.

Key Takeaways

  • Itemizing only saves you money if your total deductible expenses exceed the standard deduction for your filing status that year.
  • Common itemizable expenses include mortgage interest, state and local property taxes (capped at $10,000 per year), charitable donations, and medical expenses above 7.5 percent of your adjusted gross income.
  • You cannot itemize and take the standard deduction in the same year—you choose one or the other based on which gives you the larger deduction.
  • Keeping organized records of receipts, bank statements, and donation confirmations throughout the year makes itemizing much simpler at tax time.

Which expenses you can itemize

The IRS allows you to deduct certain categories of personal spending. Mortgage interest on a primary or secondary home is deductible, but only on loans up to $750,000. State and local property taxes (SALT) are deductible, but capped at $10,000 per year total, regardless of how many properties you own or how high your taxes are. This cap has been in place since 2017.

Charitable donations to may have access to organizations—religious groups, nonprofits, schools, hospitals—count if you have proof (receipts, bank statements, written acknowledgment from the charity). Medical and dental expenses are deductible, but only the amount that exceeds 7.5 percent of your adjusted gross income (AGI). For example, if your AGI is $60,000, you can only deduct medical costs above $4,500. Gambling losses are deductible, but only up to the amount of gambling winnings you reported. Investment expenses and tax preparation fees were deductible in past years but are not currently allowed under current tax law.

Expenses you cannot deduct include groceries, gas, car payments, home repairs, clothing, and most insurance premiums. Tuition and student loan interest have their own separate deductions (not part of itemizing). Political donations and lobbying expenses are never deductible.

Standard deduction versus itemizing: which is larger

The standard deduction changes each year and depends on your filing status. For the 2024 tax year, the standard deduction is $14,600 for single filers, $29,200 for married filing jointly, and $21,900 for head of household. These amounts increase slightly each year for inflation. You can look up the current year's amount on the IRS website or your tax software.

To decide whether to itemize, add up all your deductible expenses for the year. If the total is higher than the standard deduction for your status, itemizing saves you money. If it is lower, take the standard deduction instead. For most households, the standard deduction is larger, which is why most people do not itemize. But if you own a home with a large mortgage, live in a high-tax state, or made substantial charitable donations, itemizing might be worth the extra record-keeping.

How to track expenses throughout the year

Keeping good records makes itemizing straightforward. For mortgage interest and property taxes, your lender and tax assessor send statements each year—save these. For charitable donations, keep receipts from the charity or your bank statement showing the transfer. Many charities send year-end letters confirming donations; request one if you do not receive it. For medical expenses, save invoices, receipts, and insurance statements showing what you paid out of pocket.

A straightforward spreadsheet or folder (digital or paper) organized by category works well. Write down the date, amount, and what it was for. If you donate items to charity, photograph them and note their estimated value based on thrift-store prices—the IRS has guidelines for this. Keep all original receipts and statements for at least three years in case of an audit.

How to report itemized deductions on your tax return

When you file, you report itemized deductions on Schedule A, which is part of Form 1040. Schedule A has sections for each category: medical expenses, state and local taxes, mortgage interest, charitable gifts, and so on. You enter the amounts you calculated, and the form adds them up. The total goes to your main return, where it reduces your taxable income.

If you use tax software (TurboTax, H&R Block, TaxAct, or others), the program walks you through Schedule A step by step and asks for the information you need. If you file by hand or with a tax preparer, bring your records and receipts with you. The preparer will organize them and fill out the form. You do not submit Schedule A with your return—it stays in your records—but the IRS can ask to see it if they audit you, so keep everything for at least three years.

When itemizing costs you money instead of saving it

Itemizing is not always the right choice, even if you have deductible expenses. If your total deductible expenses are less than the standard deduction, itemizing actually reduces your deduction and costs you money in taxes. For example, if you are single with $12,000 in itemizable expenses but the standard deduction is $14,600, you are better off taking the standard deduction and saving $2,600 in deductions.

Also, some deductions phase out or disappear if your income is very high. Charitable donations are not limited by income, but other deductions have restrictions. If you are unsure whether itemizing helps, calculate both ways—it takes only a few minutes with tax software—and choose the larger deduction.

State and local tax (SALT) cap and how it affects you

The $10,000 annual cap on state and local taxes is one of the biggest limits on itemizing. This cap includes property taxes, income taxes, and sales taxes combined—you pick whichever combination is highest for you. If you live in a state with high income tax and low property tax, you deduct income tax. If you live in a state with high property tax, you deduct that instead. You cannot deduct both in full if they add up to more than $10,000.

This cap affects homeowners and high-income earners in states like California, New York, New Jersey, and Illinois most heavily. If you own property in multiple states, the $10,000 limit applies to all of them combined. Some states have explored workarounds (like allowing business owners to deduct state taxes as a business expense), but the federal $10,000 cap remains in place for individual filers.

Frequently Asked Questions

Can I itemize one year and take the standard deduction the next year?

Yes. You choose which method to use each year based on what saves you more money that year. Your situation changes—you might have a large medical expense one year, or make a big charitable donation another year. Recalculate both options each time you file and pick the larger deduction.

What if I am married filing jointly—can my spouse and I itemize separately?

No. If you file jointly, you both use the same method: either you both itemize or you both take the standard deduction. You cannot split it. If you file separately (married filing separately), each of you can choose independently, but filing separately usually costs more in taxes overall, so it is rarely worth it.

Do I need to report charitable donations if they are under a certain amount?

No minimum exists, but you need proof of every donation. The IRS does not care if it is $5 or $500—if you deduct it, you must have a receipt or bank record. For donations under $250, a receipt from the charity or your bank statement is enough. For donations of $250 or more, the charity must send you a written acknowledgment.

What happens if I claim itemized deductions and get audited?

The IRS will ask to see your records—receipts, bank statements, mortgage statements, charity letters, and medical bills. Bring everything you have. If you cannot prove an expense, the IRS disallows it and you owe tax on that amount plus interest. This is why keeping organized records is critical. You have three years to keep them, though the IRS can go back further if they suspect fraud.

Can I deduct home office expenses if I work from home?

Home office expenses are not itemized deductions. If you are self-employed, you deduct them on Schedule C (business income). If you are an employee working from home, you generally cannot deduct home office expenses under current tax law, though this has changed in the past and may change again.