What Actually Counts Toward Itemized Deductions?

Last week, we talked about the difference between taking the standard deduction and itemizing. But even when people hear the term “itemized deductions,” many are not sure what actually counts toward them.

Here is a simple breakdown of the most common expenses that may qualify when you choose to itemize:

Mortgage Interest

If you own a home, the interest portion of your mortgage payment may be deductible. There are limitations on which type of debt will qualify.

State & Local Taxes (SALT)

This includes things like state income tax, property tax, or certain sales taxes, but there are limits and rules about electing between items in this category. (More details on the SALT deduction changes in an upcoming newsletter.)

Charitable Contributions

Donations to qualified nonprofits, whether cash, checks, or certain non-cash items, can be deducted if you have proper receipts or acknowledgment letters, but some limits apply. (More details on changes to charitable giving in an upcoming newsletter.)

Medical Expenses

Some medical and dental expenses may be deductible, but only the amount that exceeds a percentage of your income. For most people, this deduction is most impactful in years with unusually high medical costs.

There are a few additional, less common categories, but these apply to fewer taxpayers.

Why This Matters

Knowing what counts toward itemizing helps you understand whether those expenses could add up to more than the standard deduction, and understanding the difference helps you make informed choices at tax time.

Each week, I share a clear, bite-sized tax insight straight from my continuing education so you can stay informed without sifting through tax changes.

Next week, we discuss when itemizing makes more sense.

Thanks for reading,

Brandy Sparkman, EA

I’ll keep learning so you can stay focused on what you do best.

See you next week for another Tax Minute.