This form allows eligible taxpayers to list specific deductions to potentially reduce their taxable income and, in turn, their overall tax burden. The form is filed with Form 1040 during tax time, either on paper or electronically.
What is Schedule A?
Schedule A provides taxpayers with the ability to itemize expenses that qualify for deductions. For taxpayers with significant qualifying expenses, itemizing on Schedule A may yield a lower taxable income compared to the standard deduction. The primary sections of Schedule A include:
- Medical and dental expenses
- Taxes you paid
- Interest you paid
- Gifts to charity
- Casualty and theft losses
- Other itemized deductions
Each category contains detailed subsections allowing you to specify the nature and amounts of your qualifying expenses.
Who should use Schedule A?
Schedule A is generally for taxpayers whose itemizable deductions surpass the standard deduction. The standard deduction amounts for 2024 are $14,600 for single filers, $29,200 for joint filers, and $21,900 for heads of household. People 65 or older may be eligible for a higher amount.
The 2024 standard deduction is taken on tax returns filed in 2025.
What can be deducted on Schedule A?
Here’s a breakdown of some popular deductions that can be claimed through Schedule A:
- Mortgage interest: Interest paid on home mortgages is often a substantial deduction. Taxpayers can generally claim interest on loans up to $750,000, with a cap of $1 million for mortgages taken before December 15, 2017.
- State and local taxes (SALT): This includes state and local income, real estate, and property taxes, but is capped at $10,000 in deductions.
- Medical and dental expenses: These must exceed 7.5% of your adjusted gross income (AGI) to be deductible. Qualifying expenses include premiums, prescriptions, and medical treatments.
- Charitable contributions: Donations to qualifying charitable organizations are deductible, with certain limitations based on the taxpayer’s AGI.
- Casualty and theft losses: These losses are only deductible if incurred in a federally declared disaster area.
How to fill out Schedule A
Filling out Schedule A requires gathering documentation for each deduction type you’re claiming. Here’s a step-by-step breakdown for each section:
- Medical and dental expenses: Tally all unreimbursed medical costs, and note that only the amount above 7.5% of your AGI is deductible.
- Taxes paid: You may deduct state and local income or sales taxes, real estate taxes, and personal property taxes. Remember, these are subject to the $10,000 SALT cap.
- Interest paid: Include home mortgage interest and certain investment interests. Mortgage information is typically provided on Form 1098 from your lender.
- Gifts to charity: List both cash and non-cash donations, like clothing or household items, with non-cash donations over $500 requiring additional Form 8283.
- Casualty and theft losses: This category allows deductions for losses on property in federally declared disaster areas.
- Other deductions: This section includes less common deductions, such as gambling losses and certain investment-related expenses.
Once you’ve totaled your deductions, the figure is transferred to your Form 1040, helping to reduce your taxable income.
How to file Schedule A
To file Schedule A, download form 1040 directly from the IRS website, fill it out, and attach it to Form 1040. Most tax software packages, such as those from TurboTax and H&R Block, offer step-by-step guidance through Schedule A if you select itemized deductions. While itemizing can require additional documentation and preparation, it is beneficial if your expenses exceed the standard deduction threshold.
Key considerations when using Schedule A
There are a few important factors to keep in mind:
- Documentation: Keep records of all receipts and statements for potential IRS verification. Retain these records for at least three years.
- Phase-Out of Deductions: Some deductions may reduce or phase out if your AGI surpasses certain levels.
- SALT cap: This limit on state and local tax deductions could impact whether itemizing benefits you.
- Comparison with standard deduction: Before choosing to itemize, compare your total itemized deductions against the standard deduction to determine the most tax-efficient approach.
