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What Are Itemized Deductions and How Do They Work?

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How much tax you owe depends on your income, but the federal government, through the Internal Revenue Service, allows you to claim deductions that reduce your taxable income and the amount of tax you ultimately owe.

Those deductions either are standard deductions — a flat rate — or itemized. With itemized deductions, you must be eligible to deduct at least one of the dozens of line items the IRS deems as qualifying. Keep reading to learn about the two main types of deductions and how they can help you reduce your tax bill.

Itemized Deductions vs. Standard Deductions

Taxpayers can use the standard deduction or take itemized deductions on their tax returns, but they can’t do both. The standard deduction is a set dollar amount that reduces a taxpayer’s taxable income. With the standard deduction, the taxpayer need not prove or calculate tax write-offs. The amount of the standard deduction is predetermined by the IRS and available to most taxpayers regardless of whether they qualify for any specific tax deductions.

Itemized deductions require the taxpayer to selectively choose and calculate each deduction they qualify for — and keep records to back them up.

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The 2017 Tax Cuts and Jobs Act changed the rules when it comes to standard vs. itemized deductions by nearly doubling the standard deduction and eliminating or cutting back many itemized deductions from tax years 2015 through 2025. The changes in the law caused more taxpayers to file using the standard deductions. In 2019, 13.7% of taxpayers itemized their deductions, compared to 31.1% before the law changes, according to the Tax Foundation.

What Is the Standard Deduction Amount?

For the 2021 tax year, the standard deduction is:

Taxpayers who are blind or at least 65 are eligible to claim an additional $1,350 standard deduction for 2021 if they are married, or $1,700 if filing as single or head of household. The deduction is doubled for taxpayers who qualify as both blind and at least 65.

For the 2022 tax year, the standard deduction will be:

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Taxpayers who are blind or at least 65 are eligible to claim an additional $1,400 standard deduction for 2022 if they are married, or $1,750 if filing as single or head of household. The deduction is doubled for taxpayers who qualify as both blind and at least 65.

What Deductions Can Be Itemized?

Taxpayers should itemize their deductions if the sum of the deductions exceeds the standard deduction. The greater the deduction, the lesser your taxes will be. 

Those who benefit by itemizing typically take at least some of the types of itemized deductions on the following list:

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You will enter your itemized deductions on Schedule A with Form 1040 on your federal tax returns.

But some taxpayers aren’t allowed to use the standard deduction. Taxpayers who must itemize deductions include:

What To Consider When Choosing Between Standard and Itemized Deductions

When weighing whether to take the standard deduction or itemize your deductions, know that both have pros and cons.

Pros of Standard Deductions

Cons of Standard Deductions

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Pros of Itemized Deductions

Cons of Itemized Deductions

The Bottom Line

Remember, you aren’t entitled to both the standard and itemized deductions, so when filing your taxes, you’ll have to choose. Taxpayers generally use whichever method is largest; that will give you the biggest tax break. A professional tax preparer can offer advice if you have any questions.

Brian Nelson and Karen Doyle contributed to the reporting for this article.