Itemized Deduction Adjustments 2025

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Itemized deductions are expenses the taxpayer incurred, such as mortgage interest, state or local income taxes, property taxes, medical or dental expenses, or charitable donations.
Adjustments are certain expenses which can directly reduce your total taxable income. These items are not included as Itemized Deductions and can be entered independently.
If your state and local taxesincluding real estate, property, income, and sales taxesplus your mortgage interest exceed the Standard Deduction, you might want to itemize. If you paid more than 7.5% of your adjusted gross income for out-of-pocket medical expenses, you might be able to deduct the amount above 7.5%.
You can include adjustments to income in Part II of Schedule 1. These can include contributions to health savings accounts, the deductible part of self-employment taxes, and IRA contribution deductions. Schedule 1 adjustments to income reduce your adjusted gross income without having to itemize deductions.
If you itemize, you can deduct these expenses: Bad debts. Canceled debt on home. Capital losses. Donations to charity. Gains from sale of your home. Gambling losses. Home mortgage interest. Income, sales, real estate and personal property taxes.
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Adjustments to income are deductions that reduce total income to arrive at AGI.
Key Takeaways. If you pay mortgage interest, state and local income or sales taxes, property taxes, or have medical and dental expenses that exceed 7.5% of your adjusted gross income, your itemized deductions may exceed your Standard Deduction.

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