Schedule A - Itemized Deductions

​Schedule A, Itemized Deductions, is a tax form for individuals that supplements Form 1040.  If you are a homeowner or work in a state with a high income tax Schedule A will likely apply.  It is beneficial to itemize deductions if the total amount will exceed roughly $6,000 for single taxpayers and roughly $12,000 for married couples.

The first section of Schedule A is for medical and dental expenses paid for out-of-pocket.  Unfortunately, you are only able to deduct these costs once they exceed 10% of your income.  For example, if a married couple earned $100,000 then they are only able to deduct medical expenses in excess of $10,000.  If they incurred $11,000 of expenses then their deduction would be $1,000.

The next section of Schedule A is for taxes paid.  Taxpayers are able to deduct the greater of state income taxes paid or state sales taxes paid.  While the majority of individuals will take the deduction for state income taxes, those who live in a state without an income tax (Texas and Florida come to mind) will be able to deduct sales tax instead.  Real estate property taxes are also included in this section.

The following sections of Schedule A are for mortgage interest, which is reported on Form 1098 if you are a home owner, and gifts to charity.  Taxpayers can deduct the amount of cash and property donated to qualified charities, which include: religious organizations, Boy Scouts, Girl Scouts, Red Cross, United Way, nonprofit hospitals, and governments.  If the gift amount is greater than $250 you must have a written statement from the charity.

The final sections of Schedule A are for casualty and theft losses, unreimbursed employee expenses, tax preparation fees, and other miscellaneous deductions.