All About Schedule A (Form 1040 or 1040-SR): Itemized Deductions

All About Schedule A (Form 1040 or 1040-SR): Itemized Deductions

What is Schedule A?

Schedule A (Form 1040 or 1040-SR) is the IRS attachment used by taxpayers who choose to itemize deductible expenses instead of claiming the standard deduction. Itemized deductions reduce your adjusted gross income (AGI) to determine taxable income.

Who can file Schedule A?

Any U.S. taxpayer may file Schedule A to itemize deductions. You should consider itemizing when your total eligible deductions exceed the standard deduction available for your filing status.

Standard deduction examples:
– Tax year 2024: Single or married filing separately — $14,600; Married filing jointly — $29,200; Head of household — $21,900.
– Tax year 2025: Single or married filing separately — $15,000; Married filing jointly — $30,000; Head of household — $22,500.

Note: The Tax Cuts and Jobs Act (TCJA) of 2017 nearly doubled the standard deduction and limited the state and local tax (SALT) deduction.

Who benefits from itemizing?

Itemizing usually benefits taxpayers with deductible expenses greater than the standard deduction. Common scenarios where itemizing may help:
– Significant mortgage interest payments.
– Large qualifying medical and dental expenses (subject to AGI thresholds).
– Major charitable contributions.
– High property and state/local taxes (subject to the SALT cap).

If your deductible expenses are less than the standard deduction, it’s generally simpler and often better to take the standard deduction.

What can be claimed on Schedule A?

Schedule A groups deductions into six main categories:
– Medical and dental expenses (subject to AGI floor)
– Taxes you paid (state/local income or sales taxes, and property taxes) — limited by SALT cap
– Interest you paid (including qualified mortgage interest)
– Gifts to charity
– Casualty and theft losses (only for property in federally declared disaster areas)
– Other itemized deductions (only those allowed by IRS rules)

Important mortgage-interest limits:
– Mortgage interest is deductible on acquisition debt up to $750,000 ($375,000 if married filing separately) for most loans.
– For qualifying debt incurred before December 16, 2017, higher limits of $1,000,000 ($500,000 if married filing separately) may apply.

SALT deduction limit:
– The deduction for state and local taxes is capped at $10,000 ($5,000 if married filing separately).

What cannot be itemized on Schedule A?

Common non-deductible items include:
– Federal income and federal excise taxes
– Social Security and Medicare taxes
– Federal unemployment and railroad retirement taxes
– Customs duties and federal gift taxes
– Per capita taxes
– Certain foreign real property taxes (see IRS guidance for specifics)

How to file Schedule A

• Download Schedule A and its instructions from the IRS website.
• Report deductible expenses in the appropriate category.
• Subtract itemized deductions from your AGI to arrive at taxable income.
• Attach Schedule A to Form 1040 or Form 1040-SR when you file your return.

Recordkeeping and tips

• Keep receipts, invoices, canceled checks, statements (Form 1098 for mortgage interest), and other documentation for all deductions you claim.
• Compare the total of your itemized deductions to the standard deduction before deciding which method to use.
• Remember that itemized deductions can be audited; retain supporting records for the period required by the IRS.

Conclusion

Schedule A is the form for taxpayers who itemize deductions instead of taking the standard deduction. Itemizing can lower your taxable income when qualifying expenses—such as mortgage interest, deductible taxes (subject to limits), charitable gifts, and large medical costs—exceed the standard deduction. Review IRS instructions and keep thorough records to support any claims.

Sources
– IRS — Schedule A (Form 1040) and Instructions
– IRS — Topic No. 501, Should I Itemize?
– IRS — Topic No. 503, Deductible Taxes
– IRS — Publication and guidance on mortgage interest limits and TCJA changes