What are itemized deductions?

Itemized deductions are specific personal expenditures that taxpayers can claim to reduce their taxable income, thereby lowering their overall tax liability. These deductions encompass various qualified expenses, including mortgage interest, property taxes, medical expenses exceeding a certain threshold, and charitable contributions.

When individuals choose to itemize their deductions instead of taking the standard deduction, they must detail each expense on their tax return. This approach can be beneficial for those whose total itemized deductions exceed the standard deduction amount available for their filing status.

The concept of itemized deductions is crucial for taxpayers looking to maximize their potential tax benefits, as it allows for a more customized approach to deductions based on individual financial situations.