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- An itemized deduction is an expense incurred by a person that reduces the amount of income that he can be taxed for, in accordance with IRS tax laws.
- Examples of itemized deductions are state and local taxes, charitable donations, medical and dental expenses, mortgage interest, and casualty and theft losses. There are also miscellaneous deductions, such as employment-related educational expenses.
- Itemized deductions are deducted by listing on Schedule A of Form 1040 all the amounts of tax-deductible items. This is added up and compared with the standard deduction, an amount established according to filing status. The larger of these deductions is the one selected on the tax return because the larger the amount, the less income tax is owed to the federal government.
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