What Are the 2022 Schedule A Itemized Deductions?

When filing federal income taxes, individuals can reduce their taxable income through various deductions. U.S. taxpayers use Schedule A (Form 1040) to report these specific expenses, known as itemized deductions. By itemizing, a person subtracts certain eligible costs from their adjusted gross income, which can result in a lower tax liability. The decision to itemize is strategic, as every taxpayer must choose between taking their calculated itemized deductions or using the predetermined standard deduction offered by the government.

Standard Deduction vs. Itemizing

The choice for a taxpayer is whether their total itemized deductions surpass the standard deduction amount for their filing status. For the 2024 tax year, the standard deduction amounts were $14,600 for Single or Married Filing Separately filers. Married couples filing a joint return and qualifying widow(er)s could claim a standard deduction of $29,200, while the amount for the Head of Household filing status was $21,900.

Additional standard deduction amounts are available for taxpayers who are age 65 or older, or who are blind. For 2024, this additional amount is $1,950 for single or head of household filers and $1,550 per person for joint filers.

Certain circumstances often lead to itemized deductions exceeding the standard amount. For instance, being a homeowner with a substantial mortgage generates deductible interest payments. Similarly, individuals in areas with high state and local taxes may find their payments exceed the standard deduction. Making large charitable donations during the year can also make itemizing a more favorable option.

Medical and Dental Expense Deductions

A category on Schedule A involves medical and dental expenses, which comes with a notable restriction. For the 2024 tax year, taxpayers can only deduct the portion of qualifying medical expenses that is more than 7.5% of their Adjusted Gross Income (AGI). This AGI threshold means only expenses above this calculated floor are eligible. For example, a taxpayer with an AGI of $60,000 would first need to calculate 7.5% of that income, which is $4,500. If they had $6,000 in qualifying medical expenses, they could deduct $1,500.

The IRS defines a wide range of qualifying expenses. Deductible costs include:

• Payments made to doctors, dentists, surgeons, chiropractors, and other medical practitioners
• The cost of prescription medications and insulin
• Health and long-term care insurance premiums paid with after-tax dollars
• Travel costs primarily for and essential to medical care, such as mileage, bus fare, and ambulance services

Conversely, many health-related expenditures are not deductible, including non-prescription drugs and cosmetic surgery that is not medically necessary. General wellness activities like gym memberships or diet foods are also not deductible. Given the AGI threshold and detailed rules, maintaining records of all medical and dental payments is necessary to accurately calculate this deduction.

State and Local Tax Deductions

The deduction for state and local taxes (SALT) is subject to a limitation. The total amount a taxpayer can deduct for all state and local taxes combined is capped at $10,000 per household, or $5,000 for those married and filing separately. This single limit applies to the sum of property taxes and either income or sales taxes, and is set to expire at the end of 2025 unless Congress acts to extend it.

Taxpayers must choose to deduct either their state and local income taxes or their general sales taxes, whichever is higher. Those in states with no income tax will opt for the sales tax deduction.

To determine the amount of sales tax paid, a taxpayer can use their actual receipts from the year. A more common method is to use the optional sales tax tables provided by the IRS. These tables provide an estimated sales tax amount based on income and family size, and a taxpayer can add the actual sales tax paid on certain large purchases, like a vehicle or boat, to the table amount.

Home Mortgage and Investment Interest Deductions

For the 2024 tax year, taxpayers can deduct the interest paid on up to $750,000 of home acquisition debt ($375,000 for married taxpayers filing separate returns). Home acquisition debt is defined as a mortgage used to buy, build, or substantially improve a taxpayer’s main home or a second home.

The use of the loan proceeds is a determining factor. Interest on a home equity loan or a home equity line of credit (HELOC) is only deductible if the funds are used to buy, build, or substantially improve the home that secures the loan. If the proceeds are used for personal expenses, such as paying off credit card debt or taking a vacation, the interest is not deductible. This rule applies regardless of when the loan was taken out.

Taxpayers may also be able to deduct mortgage points, which are fees paid to the lender to obtain a mortgage. These points are deductible over the life of the loan, but in some cases, can be fully deducted in the year they are paid. A separate category is investment interest, which is interest paid on money borrowed to purchase investments. This deduction is limited to the amount of net investment income earned and is calculated on Form 4952.

Charitable Contribution and Other Itemized Deductions

For 2024, cash contributions made to qualified charitable organizations can be deducted up to 60% of the taxpayer’s adjusted gross income (AGI). Donations of non-cash property are subject to different AGI limits, typically 20%, 30%, or 50%, depending on the type of property and the organization.

Strict recordkeeping is required to claim a charitable deduction. For any donation, a taxpayer must maintain a reliable written record, such as a bank record or a written communication from the charity. For any single contribution of $250 or more, a taxpayer must obtain a contemporaneous written acknowledgment from the organization before filing their return. This acknowledgment must state the amount of the cash and a description of any property contributed.

The “Other Itemized Deductions” section of Schedule A covers less common expenses. For 2024, casualty and theft losses are restricted and can only be deducted if the loss occurred in a federally declared disaster area. Another deduction is for gambling losses, which a taxpayer can deduct only up to the amount of their reported gambling winnings. These losses are reported on Schedule A and cannot exceed the winnings reported as income on Schedule 1 (Form 1040).