An itemized deduction is an eligible expense that taxpayers can subtract from their adjusted gross income (AGI) to reduce their taxable income and ultimately lower their tax bill. These deductions are typically incurred for specific purposes, such as medical expenses, mortgage interest, state and local taxes, charitable contributions, and certain business expenses. Instead of claiming the standard deduction, taxpayers who choose to itemize deductions must maintain accurate records and documentation to support their eligible expenses. By itemizing deductions, taxpayers can potentially maximize their tax savings by reducing the amount of income subject to taxation.
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