When filing your federal income tax return, you have two primary choices for reducing your taxable income: take the standard deduction or itemize your deductions using Schedule A (Form 1040). While the standard deduction is simpler, itemizing may yield greater tax savings for those with significant deductible expenses. This guide will walk you through each section of Schedule A, helping you understand what qualifies, how to document it, and whether itemizing is the best strategy for you.
What Is Schedule A?
Schedule A is an attachment to IRS Form 1040 that allows taxpayers to report specific eligible expenses—called itemized deductions—that can reduce their taxable income. Instead of using the flat standard deduction, taxpayers use Schedule A to list out individual deductible amounts across categories such as medical expenses, state taxes, mortgage interest, and charitable contributions.
Itemized deductions benefit taxpayers whose total deductible expenses exceed the standard deduction. For 2025, the standard deduction amounts are:
- $13,850 for single filers
- $27,700 for married filing jointly
- $20,800 for heads of household
Who Should File Schedule A?
You should consider itemizing your deductions using Schedule A if:
- You have high out-of-pocket medical expenses
- You pay substantial state and local taxes
- You paid mortgage interest on a qualified home loan
- You made large charitable contributions
- You incurred casualty or theft losses in a federally declared disaster area
Sections of Schedule A and What to Include
1. Medical and Dental Expenses
Only unreimbursed expenses that exceed 7.5% of your adjusted gross income (AGI) are deductible. Examples include:
- Health insurance premiums (if not deducted elsewhere)
- Prescription drugs and insulin
- Doctor, dentist, and hospital bills
- Medical equipment and supplies
- Travel costs for medical treatment
Tip: Keep receipts and mileage logs if you traveled for treatment.
2. Taxes You Paid
This section includes state and local taxes, with a combined limit of $10,000 ($5,000 for married filing separately):
- State and local income or sales tax (choose one)
- Real estate property taxes
- Personal property taxes (e.g., car registration fees based on value)
3. Interest You Paid
You can deduct qualified mortgage interest and points paid. This includes:
- Interest on your primary or secondary home mortgage (subject to limits)
- Points paid at closing to obtain a mortgage
- Mortgage insurance premiums (if applicable and extended by Congress)
Note: Home equity loan interest is only deductible if used to buy, build, or substantially improve your home.
4. Gifts to Charity
Contributions to qualified charitable organizations can be deducted, including:
- Cash donations
- Non-cash donations (clothing, goods, furniture)
- Mileage driven for volunteer work (14 cents per mile)
- Donations made through payroll deduction
Donations over $250 require written acknowledgment from the charity. Non-cash donations exceeding $500 require Form 8283.
5. Casualty and Theft Losses
You may claim losses from federally declared disasters. The deductible amount must exceed 10% of your AGI and a $100 floor per casualty. Use Form 4684 to calculate this amount before entering it on Schedule A.
6. Other Itemized Deductions
This includes deductions like:
- Gambling losses (up to the amount of winnings)
- Impairment-related work expenses for persons with disabilities
- Unrecovered investment in a pension
How to Compare with the Standard Deduction
If your total itemized deductions on Schedule A exceed the standard deduction for your filing status, you’ll benefit from itemizing. Otherwise, you should stick with the standard deduction. Software and tax professionals can help make this determination.
Example: Suppose you’re a single filer with:
- $6,000 in state/local taxes
- $5,000 in mortgage interest
- $2,500 in charitable donations
Total itemized deductions = $13,500. Since this is less than the $13,850 standard deduction, you would likely choose the standard deduction.
Documentation and Recordkeeping
To avoid IRS issues, always retain documentation for your deductions:
- Receipts for medical bills and prescriptions
- Real estate tax bills and mortgage statements (Form 1098)
- Acknowledgments for charitable donations
- Proof of payment such as bank statements or canceled checks
Common Mistakes to Avoid
- Claiming sales tax and state income tax together (choose one)
- Not applying AGI limits (e.g., 7.5% for medical expenses)
- Overestimating charitable values (especially for used goods)
- Not attaching Form 8283 for large donations
- Forgetting to check the phase-out rules for high-income earners (mostly repealed)
Conclusion
Schedule A offers an opportunity to reduce your taxable income by accounting for real-life expenses. For taxpayers with high deductible costs—especially homeowners, donors, and those with large medical bills—itemizing can result in significant tax savings. Be diligent in tracking your expenses, understand the limits for each category, and consult a tax professional or use reliable tax software to ensure you’re maximizing your deductions properly.
