What are itemized deductions and how do I use them?

What are itemized deductions and how do I use them?

Itemized deductions are specific expenses that you can deduct from your taxable income. They can reduce your tax bill.

What types of expenses can I itemize?

Common itemized deductions include mortgage interest, property taxes, medical expenses, and charitable contributions.

How do I decide if I should itemize or take the standard deduction?

You should compare the total of your itemized deductions to the standard deduction. Choose the higher amount to maximize your tax benefit.

Are there limits on how much I can deduct?

Yes, some deductions have limits. For example, medical expenses must exceed 7.5% of your adjusted gross income to be deductible.

Can I itemize deductions if I take the standard deduction in previous years?

Yes, you can choose to itemize deductions in any year, regardless of whether you took the standard deduction in previous years.