Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Itemized Deductions

Summary and Exercises

Summary

Medical and Dental Expenses

Deductible medical and dental expenses are reported and calculated on lines 1 through 4 of Schedule A (over 10% threshold of AGI). If the taxpayer or their spouse is age 65 or over, they will use the 7.5% threshold of AGI thru the 2016 tax year.

Qualified medical and dental expenses are expenses the taxpayer paid during the tax year for the taxpayer, spouse, dependents, and in some instances, individuals not listed as dependents provided certain conditions are met.

Taxes

Deductible taxes are reported on lines 5 through 9 of Schedule A. Taxpayers can deduct the following:

  • State and local income taxes, optional sales tax
  • State, local, or foreign real estate taxes
  • State and local personal property tax payments

Interest

Deductible interest is reported on lines 10 through 15 of Schedule A.

Generally, the taxpayer receives Form 1098, Mortgage Interest Statement, which shows the deductible amount of interest paid by the taxpayer. To be deductible, the interest must have been paid by the taxpayer during the tax year. Only taxpayers who are legally liable for the debt can deduct the interest.

Only points paid as a form of interest (for the use of money) can be deducted on Schedule A. Generally, points must be spread over the life of the mortgage. However, if the loan is used to buy or build a taxpayer's main home, the taxpayer may be able to deduct the entire amount in the year paid.

Points paid to refinance a mortgage are generally not deductible in full the year the taxpayer paid them, unless the points were paid in connection with the improvement of a main home and certain conditions were met.