Tax & paperwork

Itemized Deduction

Also called: itemizing, Schedule A

Listing specific deductions (state/local taxes, mortgage interest, charity, medical) on Schedule A instead of taking the flat standard deduction.

Itemizing means listing your individual deductions on Schedule A and adding them up, rather than taking the flat standard deduction. You use whichever produces the larger total.

Common itemized deductions:

  • State and local taxes (SALT) — capped at $10,000 combined
  • Home mortgage interest (subject to loan-size caps)
  • Charitable contributions to qualified organizations
  • Medical and dental expenses above 7.5% of AGI
  • Casualty and theft losses in federally declared disaster areas

For most tipped and gig workers without a mortgage and big charitable giving, the standard deduction wins. The Tax Cuts and Jobs Act of 2017 roughly doubled the standard deduction and capped SALT, which pushed itemizers from ~30% of filers to about 12%.

Important: business expenses for self-employed workers (mileage, supplies, phone) go on Schedule C, NOT Schedule A. You take those regardless of whether you itemize on the personal side.