Schedule A (Form 1040): Itemized Deductions Definitive Guide

KEY TAKEAWAYS

• You can deduct certain expenses on Schedule A (Form 1040) if they exceed a specified percentage of your adjusted gross income (AGI)
• The most common deductions are for medical and dental expenses, mortgage, taxes, and charitable contributions
• You must itemize your deductions on Schedule A (Form 1040) to claim them
• There is a limit on the total amount of itemized deductions that you can claim depending on your AGI
• If you do not itemize your deductions, you can still claim the standard deduction

What is Schedule A (Form 1040 or 1040-SR)?

Schedule A is used by filers who itemize their deductions on Form 1040 or Form 1040-SR. The total of all allowable itemized deductions is then entered on Line 8a of Form 1040. 

Itemized deductions may include expenses such as medical and dental expenses, home mortgage interest, charitable contributions, state and local taxes, and more. Schedule A instructions list the types of expenses that can be deducted.

Assuming that you itemize your deductions on Schedule A (Form 1040), you can deduct certain expenses:

• Home-related expenses
• Medical and dental expenses
• State and local taxes
• Mortgage interest you paid
• Charitable contributions
• Certain casualty and theft losses
• Other itemized deductions, such as gambling losses or impairment-related work expenses of a disabled person

As a general rule, you can deduct any expenses that are considered necessary and helpful in the production of your income. If you are a person with disabilities, you can take a deduction for expenses that are necessary for you to be able to work. These impairment-related work expenses are not subject to the 7.5% limit that applies to medical expenses. For example:

• Physical disabilities
• Intellectual disability
• Psychiatric disability

People with disabilities who couldn’t seek employment opportunities will benefit from these deductions.

There are a few federal agencies that have their own rules about what is considered a deductible disability expense. The Social Security Administration (SSA) has a list of approved expenses. These can be deducted if you are receiving disability benefits. The IRS also provides guidance on what disability-related expenses you can deduct from your taxes.

How To Fill Out Schedule A

The application process can be daunting. You may need to seek the help of a federal employee to assist you. Be sure to arrange an appointment time for satisfactory service for a period of time. The service type you receive depends on the federal employee.

You may need to complete and attach Schedule A (Form 1040) if you itemize deductions on Form 1040 and:

• You plan to deduct charitable contributions of more than $500
• You plan to deduct medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI)  
• You had large unreimbursed employee business expenses, such as travel, meals, union dues, work-related education, etc. 
• You incurred substantial interest or investment expenses
• You had substantial gambling losses 
• You have other itemized deductions, such as theft or casualty losses not covered by insurance, medical savings account (MSA) contributions, etc.

Schedule A (Form 1040) is divided into several parts. Let’s look at the first two. Part I is for figuring out your allowable medical and dental expenses and Part II is for all other allowable itemized deductions. 

Part I – Medical and Dental Expenses 

Enter on line 1 all deductible medical and dental expenses that you paid during the year for yourself, your spouse, and your dependents. The total of these expenses must be more than 7.5% of your AGI before you can claim them. 

Schedule A Group II – Other Taxes

You can deduct other taxes in this part. These include state and local income taxes, real estate taxes, personal property taxes, and foreign taxes. You can also deduct any tax you paid on an inheritance.

How Schedule A works

Schedule A is the form used to itemize deductions. This means that instead of taking the standard deduction, you list out all of your deductible expenses and claim them on your taxes. This can be a complicated process, but it’s worth it if it saves you money in the long run.

There are two ways to file Schedule A: online or by paper. If you choose to file online, you’ll need to provide information about your income, deductions, and tax return filing status. You’ll also need to create an account with the IRS. Filing by the paper is a bit simpler, but it requires you to mail in your return.

Once you’ve filed Schedule A, you’ll need to keep track of all of your deductions. This includes receipts, mileage logs, and records of any charitable donations you’ve made. Keeping good records will help you maximize your deductions and minimize your tax liability.

Who Can File Schedule A Tax Form?

The short answer is any filer who itemizes their deductions. This includes those who file as single, head of household, or married filing jointly. For married filing separately, if your spouse itemizes deductions, you can’t claim the standard deduction. 

Itemizing your deductions allows you to list out certain expenses you’ve incurred throughout the year and deduct them from your taxable income. This lowers your overall tax liability and could result in a bigger refund come tax time.

While most people automatically assume that itemizing is only for those who have a lot of expenses, this isn’t always the case. In fact, there are several situations where even filers with relatively low incomes can benefit from itemizing their deductions. These include:

• You have high out-of-pocket medical expenses
• You made a large charitable donation
• You paid interest on student loans or a home mortgage
• You incurred significant unreimbursed job expenses

Generally speaking, you should itemize your deductions if doing so will give you a lower tax bill than taking the standard deduction. The standard deduction is a set amount that filers can deduct from their taxable income regardless of their individual circumstances. 

For example, in the 2022 tax year, the standard deduction is $12,950 for single filers, $19,400 for a head of household, and $25,900 for married couples filing jointly.

Which items can be deducted from Schedule A?

The first section of Schedule A is a list of common deductions that taxpayers can itemize. This includes:

Medical and Dental Expenses. You can deduct any out-of-pocket medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI). This includes things like doctor’s visits, hospital bills, prescriptions, and dental work.

State and Local Taxes. You can deduct state and local income taxes, or state and local general sales taxes, as well as property taxes. This deduction is capped at $10,000 ($5,000 if you’re married and filing separately).

Interest Paid. You can deduct interest paid on your mortgage, as well as investment interest up to the amount of your net investment income.

Gifts to Charity. You can deduct cash and property donations from qualified charitable organizations.

Job-Related Expenses. You can deduct certain job-related expenses, such as union dues and work-related education.

Other Deductions. There are a few other miscellaneous deductions that you may be able to claim, such as gambling losses and investment expenses.

Summary

A filer completes a Schedule A (Form 1040 or Form 1040-SR) when they itemize their deductions rather than take the standard deduction. These deductions include medical and dental-related costs as well as interest paid on a mortgage or student loans, unreimbursed work related expenses and other expenses. 

Written by Sandra Habiger, CPA

Sandra Habiger is a Chartered Professional Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Alongside her accounting practice, Sandra is a Money and Life Coach for women in business.

Written by Sandra Habiger, CPA

Sandra Habiger is a Chartered Professional Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Alongside her accounting practice, Sandra is a Money and Life Coach for women in business.