What Can You Itemize on Your Income Taxes?

When filing federal income taxes, you can reduce your taxable income by claiming specific, eligible expenses, a process known as itemizing deductions. This method allows you to list various costs incurred throughout the year, such as for medical care or charitable giving, and subtract them from your adjusted gross income (AGI).

Itemizing is an alternative to taking the standard deduction, a predetermined amount set by the government. The decision to itemize depends on whether the sum of your deductible expenses is greater than the standard deduction for your filing status. All itemized deductions are reported on Schedule A (Form 1040).

The Standard Deduction vs Itemizing

The standard deduction is a specific dollar amount you can subtract from your AGI, simplifying the tax filing process. For the 2025 tax year, the standard deduction is $15,000 for single filers and those married filing separately. For heads of household, the amount is $22,500, and for married couples filing jointly, it is $30,000.

You must calculate the total of your potential itemized deductions for the year. If this total is higher than the standard deduction for your filing status, it is advantageous to itemize. For instance, if a single individual has $16,000 in allowable itemized expenses, they would choose to itemize rather than take the $15,000 standard deduction.

Certain situations may require you to itemize; for example, if you are married filing separately and your spouse itemizes, you must also itemize.

Medical and Dental Expense Deductions

One category for itemized deductions involves medical and dental expenses, but it is restricted. You can only deduct the amount of qualifying medical expenses that exceeds 7.5% of your Adjusted Gross Income (AGI). For example, if your AGI is $60,000, the threshold is $4,500. If you incurred $7,000 in qualifying medical expenses, you could deduct $2,500.

Qualifying expenses are broad and include payments to doctors, dentists, surgeons, and other medical practitioners. The costs of hospital care, including inpatient meals and lodging, are deductible, as are payments for prescription medications. Health and long-term care insurance premiums paid with after-tax dollars can be included, as can travel costs for obtaining medical care.

Expenses that are not deductible include non-prescription drugs, toiletries, and most cosmetic surgery. Any medical expenses reimbursed by insurance or paid using funds from a Health Savings Account (HSA) cannot be deducted.

State and Local Tax (SALT) Deductions

You can deduct certain state and local taxes you paid, but this deduction is capped at $10,000 per household per year ($5,000 if married filing separately). The taxes that fall under this cap include a choice of either state and local income taxes or general sales taxes; you cannot deduct both. This is combined with any state and local real estate and personal property taxes.

To deduct income taxes, you would use the amount withheld from your paychecks plus any estimated tax payments. Alternatively, you can deduct state and local general sales taxes, an option beneficial for residents of states without an income tax. You can determine this amount using the IRS’s optional sales tax tables or by totaling your actual receipts.

Real estate taxes are paid on property you own, such as your home, while personal property taxes are based on the value of items like a car or boat.

Home Mortgage and Investment Interest Deductions

Interest paid on loans can be a substantial itemized deduction, primarily related to home mortgages and investment activities. For homeowners, the deduction for mortgage interest applies to debt used to buy, build, or substantially improve a qualified residence, which can be a primary or second home.

For mortgages taken out after December 15, 2017, interest on up to $750,000 of mortgage debt is deductible ($375,000 if married filing separately). For mortgages that originated before this date, the limit is $1 million ($500,000 if married filing separately). Your lender reports the interest you paid for the year on Form 1098.

Interest on a home equity loan or a home equity line of credit (HELOC) is only deductible if the loan proceeds are used to buy, build, or substantially improve the home that secures the loan. If the funds are used for other personal expenses, the interest is not deductible.

A separate deduction is available for investment interest, which is interest paid on money you borrowed to purchase taxable investments, such as buying stocks on margin. The deduction for investment interest is limited to your net investment income for the year. Any investment interest paid that exceeds your net investment income can be carried forward to future tax years.

Charitable Contribution Deductions

To be deductible, a contribution must be made to a qualified organization, which includes entities like churches, nonprofit hospitals, and publicly supported charities. Donations to individuals, political campaigns, or for-profit entities are not deductible. For cash contributions, including donations made by check or credit card, the deduction is limited to 60% of your adjusted gross income (AGI). If your contributions exceed this limit, you can carry the excess amount forward for up to five years.

Donating property other than cash involves more complex rules. For “ordinary income property,” which is property that would have generated ordinary income if sold, the deduction is limited to your cost basis. For “capital gain property,” such as stocks or real estate held for more than a year, you can deduct its fair market value. Record-keeping is a requirement for all charitable deductions.

• For any single cash contribution under $250, you must maintain a reliable record, such as a canceled check or a bank statement.
• For any single contribution of $250 or more, you must obtain a written acknowledgment from the charity that states the amount of the donation and whether you received any goods or services in return.
• For non-cash donations over $500, you must complete and file Form 8283.
• For donations valued at more than $5,000, a qualified appraisal is generally required.