What You Need to Track if You Want to Itemize

If you decide to itemize your deductions or even think you might, good record-keeping is essential. Itemized deductions require documentation, and the IRS expects you to be able to show where the numbers came from.

Here is a quick list of what to track throughout the year:

Mortgage Interest

Your lender provides Form 1098 each year showing exactly how much mortgage interest you paid. Keep this with your tax documents.

State & Local Taxes

This includes:

• Property tax bills

• State income tax withholding

• Any estimated state tax payments you made

Save statements, payment confirmations, or tax bills for your records.

Charitable Contributions

You will need:

• Donation receipts

• Acknowledgment letters for larger gifts

• Lists of non-cash donations (like clothing, household items, etc.)

The documentation required depends on the amount and type of contribution.

Medical Expenses

If you had significant medical or dental costs, keep:

• Insurance statements

• Provider invoices

• Pharmacy receipts

• Records of mileage for medical travel (if applicable)

Remember that qualified medical expenses are only deductible to the extent they exceed 7.5% of your adjusted gross income.

Why This Matters

Itemizing can be beneficial, but it only works when the information is accurate and properly supported. Good documentation protects your deductions, speeds up tax preparation, and helps avoid IRS issues.

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 provide an update on recent changes to the SALT Deduction.

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.