Itemized deductions are separately listed tax deductions a person claims when filing a tax return. The IRS allows individual taxpayers and couples to choose between a standard deduction amount and the total of itemized deductions. Common allowable deductions include mortgage interest and property taxes, according to the IRS.Continue Reading
In general, it makes more sense for a tax filer to itemize deductions when the total of all deductions exceeds the standard amount, according to TurboTax. For homeowners with a mortgage or equity financing, itemizing is often the right choice because these deductions alone can often exceed the standard amount. Mortgage points and property taxes extend the total deductions available just from home ownership.
A person can typically take a deduction for financial or non-monetary donations to an IRS-recognized nonprofit organization. However, receipts are required for any cash contribution and for non-monetary contributions with a value of $250 or more, according to the IRS. Business operators are also able to deduct business expenses. It is possible to deduct portions of home utility costs and car costs when these assets are used partially for business.
The total of itemized tax deductions is subtracted from gross income reported to arrive at taxable income, according to the Tax Policy Center. As taxable income falls, so does the tax burden.Learn more about Income Tax