What Are Itemized Tax Deductions? Definition and Impact on Taxes

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Updated March 08, 2023
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What Are Itemized Deductions?

An itemized deduction is an expense that can be subtracted from your adjusted gross income (AGI) to reduce your taxable income and lower the amount of taxes you owe. Taxpayers can itemize deductions like mortgage interest, charitable gifts, and unreimbursed medical expenses or choose to take the standard deduction, a fixed dollar amount that varies by filing status.

Key Takeaways

  • An itemized deduction is an expense that can be subtracted from adjusted gross income (AGI) to reduce your tax bill.
  • Itemized deductions must be listed on Schedule A of Form 1040.
  • Taxpayers can choose to itemize deductions or claim the standard deduction that applies to their filing status.

Understanding Itemized Deductions

Itemized deductions reduce your taxable income, and your savings depends on your tax bracket. An unmarried single filer with a gross income of $80,000 may claim itemized deductions totaling $15,000. Subtracting those deductions from gross income yields a taxable income of $65,000, falling within a 22% marginal tax rate bracket for 2022 and 2023.

Itemized deductions are recorded on Schedule A of Form 1040. Taxpayers must save all receipts and documentation of expenses reported in case the Internal Revenue Service (IRS) requests them in an audit. Additional proof can include bank statements, insurance bills, medical bills, and tax receipts from qualified charitable organizations.


Tax deductions should not be confused with tax credits, which directly reduce your tax bill. If you calculate your taxes due as $14,000 and are eligible for a $1,000 tax credit, your bill is cut by $1,000 to $13,000.

Itemized Deduction vs. Standard Deduction

The majority of taxpayers have the option to itemize deductions or claim the standard deduction. Nonresident aliens must itemize, and married individuals who are filing separately must claim the same type of deduction.

The decision depends on which deduction type garners the lowest tax liability. If you file as a single taxpayer or are married and filing separately, you will fare better with the standard deduction of $12,950 for 2022 or $13,850 for 2023 if your itemized deductions total less than that amount.

Standard Deductions for 2022 and 2023
 Filing Status 2022 Standard Deduction 2023 Standard Deduction
Single $12,950 $13,850
Married Filing Separately $12,950 $13,850
Head of Household  $19,400 $20,800
Married Filing Jointly  $25,900 $27,700

What Can I Itemize?

The list of expenses that can be itemized is extensive, available on the IRS website, and can include some medical expenses, mortgage interest, charitable contributions, and state and local taxes. Taxpayers use Schedule A, part of IRS Form 1040, to calculate and list deductions.

2022 IRS Schedule A (Form 1040)

Schedule A can be downloaded on the IRS website.

You can deduct mortgage interest on a loan of $750,000 or less for any home bought on or after Dec. 16, 2017, and charitable donations of up to 60% of your AGI but depends on the type of contribution and the charity.

You can also deduct qualified, unreimbursed medical and dental expenses over 7.5% of AGI; state and local income or sales taxes plus real estate and personal property taxes up to $10,000 or $5,000 if married filing separately, gambling losses, and investment interest less than investment income.

Pros and Cons of Itemizing Deductions

Deductions You Can Itemize

  • Mortgage interest on the first $750,000 of indebtedness—or $1 million, if you bought the home before Dec. 16, 2017

  • Charitable contributions

  • Medical and dental expenses over 7.5% of adjusted gross income (AGI)

  • State and local income, plus either personal property or sales taxes up to IRS threshold

  • Gambling losses

  • Investment interest

Deductions You Cannot Itemize

  • Mortgage interest on loan amounts over $750,000—unless you bought your home before Dec. 16, 2017

  • State and local income, sales, and personal property taxes beyond IRS threshold

  • Unreimbursed employee expenses

  • Tax preparation expenses

  • Natural disaster losses unless in a federally declared disaster area

What Does It Mean to Claim Itemized Deductions?

When you file your income tax return, you can take the standard deduction, a fixed dollar amount based on your filing status, or itemize your deductions. Unlike the standard deduction, the dollar amount of itemized deductions vary by the taxpayer, depending on the expenses on Schedule A of Form 1040. The amount is subtracted from the taxpayer’s taxable income.

Which Expenses Can I Itemize?

You itemize your deductions on Schedule A of Form 1040. You can generally deduct unreimbursed medical and dental expenses, long-term care premiums, home mortgage interest, charitable donations, certain taxes, casualty and theft losses, and some gambling losses.

Who Should Itemize Deductions?

You have the option to take the standard deduction or itemize your deductions. If the value of expenses you can itemize is greater than the standard deduction, then it likely makes sense to itemize.

What Are the Standard Deduction Amounts for 2022 and 2023?

For 2022, the standard deduction is $12,950 ($13,850 for 2023) for single and married, filing separately, taxpayers, $19,400 ($20,800 for 2023) for heads of households, and $25,900 ($27,700 for 2023) for married filing jointly filers and surviving spouses.

The Bottom Line

An itemized deduction is an expense that can be subtracted from your adjusted gross income (AGI) to reduce your tax bill. Taxpayers can itemize deductions or claim the standard deduction that applies to their filing status. Itemized deductions must be listed on Schedule A of Form 1040 and may include mortgage interest, charitable gifts, and unreimbursed medical expenses.

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  1. Internal Revenue Service. “About Schedule A (Form 1040), Itemized Deductions.”

  2. Internal Revenue Service. “Topic No. 501 Should I Itemize?”

  3. Internal Revenue Service. “IRS Provides Tax Inflation Adjustments for Tax Year 2023.”

  4. Internal Revenue Service. “IRS Provides Tax Inflation Adjustments for Tax Year 2022.”

  5. Internal Revenue Service. “Credits and Deductions for Individuals.”

  6. Internal Revenue Service. “IRS Provides Tax Inflation Adjustments for Tax Year 2023.”

  7. Internal Revenue Service. “2022 Instructions for Schedule A.”

  8. Internal Revenue Service. “Publication 936, Home Mortgage Interest Deduction.”

  9. Internal Revenue Service. “Charitable Contribution Deductions.”

  10. Internal Revenue Service. “Topic No. 502 Medical and Dental Expenses.”

  11. Internal Revenue Service. “Topic No. 503 Deductible Taxes.”

Part Of
Federal Income Tax Guide