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Itemized deductions: What they are, types, and how to claim them [2025]


What are itemized deductions?

Itemized deductions are individual expenses you can claim to decrease your taxable income and potentially maximize your tax savings.


If you’re dreading your tax bill this season, the small business deductions you choose to claim can make all the difference in how much you’ll owe (or save). As we head into tax season 2025, all taxpayers must decide whether to take the standard deduction or itemize personal or “individual” expenses to reduce their taxable income.

When you’re self-employed or a small business owner, sometimes the line between personal and business expenses can get blurry. Depending on your situation, itemizing your deductions may be the best choice to maximize your savings. 


In this article, we’ll cover everything you need to know about itemized deductions for the 2025 tax year, including the most common ones and the forms you’ll need to file.

How itemized deductions work

To claim your itemized deductions, you’ll use Schedule A (Form 1040) to list and calculate your eligible expenses. You’ll then subtract the total from your gross income. What remains is deemed your taxable income.

Here is an example of how a Schedule A might look: 

example of schedule A filled out

Keep in mind that this is only an example. You will need to fill out your own Schedule A with your information. 

You can find detailed instructions for the eligible expenses on the IRS website. Make sure you keep receipts for all of your business-related expenses.

After adding up your eligible expenses, you can compare them to the standard deduction. You’ll only want to itemize deductions if the total amount is greater than the standard deduction. While it generally takes more time and effort to keep up with receipts throughout the year, it’s worth the bigger tax refund or smaller tax bill. 


note icon Itemize deductions only if they exceed the standard deduction—though it takes more effort, the payoff could mean a bigger refund or smaller tax bill.


Itemized vs. standard deduction

While an itemized deduction is an individual expense you can claim, a standard deduction lowers your taxable income by a preset amount. These set amounts are based on your filing status. 

Below are the standard deduction amounts for the 2025 tax year:

  • Single or married filing separately: $15,000 (up from $14,600 in 2024)
  • Married filing jointly: $30,000 (up from $29,200 in 2024)
  • Head of household: $22,500 (up from $21,900 in 2024)

Most people are eligible for the standard deduction on their tax return, but it may not always get you the maximum tax deduction. Instead, it might be best to itemize your deductions.


note icon If you're a nonresident alien or married filing separately when your spouse itemizes, you must itemize deductions as well and can't take the standard deduction.


Types of itemized deductions

Itemized deductions can be a range of expenses from both personal and self-employed business transactions. Below are the most common expenses you can write off:

image showing 6 common itemized deductions

Medical and dental expenses

Medical and dental expenses can represent a significant portion of your annual budget, especially if you’ve had major health-related costs. 

These expenses offer taxpayers a valuable opportunity to reduce taxable income through deductions, making them a critical consideration during tax season. 

Some common examples of deductible medical and dental expenses:

  • Doctor visits, specialist consultations, and outpatient services
  • Inpatient hospital care, surgeries, and medical procedures
  • Prescription medications and insulin
  • Long-term care insurance premiums
  • Medical equipment like wheelchairs, crutches, and hearing aids
  • Dental care, including cleanings, fillings, and orthodontics
  • Mental health services such as therapy or counseling
  • Travel costs related to medical care, like mileage and lodging for out-of-town appointments

But remember, not all expenses are eligible for deduction. To claim these costs as itemized deductions, the total must exceed 7.5% of your Adjusted Gross Income (AGI). Additionally, you cannot deduct any costs reimbursed by insurance, employer-sponsored plans, or other sources. Over-the-counter medications, cosmetic procedures, and general wellness expenses (like gym memberships) are also excluded. 


note icon Use a health savings account (HSA) or flexible spending account (FSA) to cover medical expenses with pre-tax dollars, reducing your overall taxable income even further.


Taxes paid

You can deduct various personal property taxes to help reduce your taxable income. These deductions can include real estate, state, and local taxes you paid during the past year. If you occasionally rent out your home or a portion of it, you can still claim these deductions, provided the rental period does not exceed 14 days per year.

Here are the types of taxes you can deduct:

  • Real estate taxes: Property taxes paid on your primary residence, vacation home, or other real estate.
  • State income taxes or sales taxes: You can deduct either state and local income taxes or the sales taxes you paid during the year (but not both).
  • Personal property taxes: Taxes paid on items like vehicles, boats, or other property assessed based on value.

Keep in mind that these deductions are capped at $10,000 for most taxpayers ($5,000 if married filing separately). Additionally, if you itemized these deductions in the previous year and received a tax refund, that refund must be reported as income on your current-year tax return.


note icon Consider comparing state income and sales taxes to determine which offers the greater deduction.



Mortgage interest

If you own or pay the mortgage on your home, you can and should receive a deduction on your mortgage interest. To do so, your mortgage lender should send you a Form 1098 outlining the deductible interest and points, which are charges associated with getting a home mortgage, that you’ve paid over the past year. 

You may also be able to deduct certain mortgage points that you’ve paid if you’ve:

  • Refinanced or bought your home in the past year
  • Used your home as a rental property
  • Performed renovations/made home improvements

Remember that there are mortgage interest limits, in which the deduction is only for the first $750,000 of mortgage debt for your first or second home (or $375,000 for married couples filing separately). 


note icon If you refinanced or purchased a home in the past year, check if you paid mortgage points—these could be deductible in addition to your interest.


Charitable contributions

Charitable contributions are a meaningful way to give back to your community and a valuable opportunity to reduce your taxable income. 

Whether you donate as an individual or through your business, these gifts to qualified organizations can be claimed as itemized deductions, often leading to significant tax savings. 

Some common examples of deductible charitable contributions:

  • Monetary donations to nonprofit organizations, including religious, educational, and charitable groups
  • Donations of physical items such as clothing, furniture, or household goods to thrift stores and shelters
  • Stocks, bonds, or other securities gifted to qualified organizations
  • Volunteer-related expenses, such as mileage and transportation costs incurred while performing charity work
  • Sponsorships for nonprofit fundraising events or programs
  • Contributions made through employer-sponsored giving campaigns

If you’re filing as an S corporation or a partnership, your portion of the business’s charitable contributions will be reported on the Schedule K-1 issued to you by the business. You will then report your share of these contributions on Schedule A of your personal tax return. 

For individual taxpayers, cash contributions are generally limited to 60% of your Adjusted Gross Income (AGI), while noncash contributions may have lower limits. 


note icon Donating appreciated stocks or assets directly to a charity lets you avoid capital gains taxes while claiming the full market value as a deduction.



Casualty and theft losses

Casualty and theft losses can be claimed as itemized deductions on your tax return, but only if these losses are attributable to a federally declared disaster. These types of losses are typically linked to damage or destruction of property and might include:

  • Damage caused by natural disasters (floods, hurricanes, tornadoes, earthquakes, etc.)
  • Losses from fire, vandalism, or theft
  • Theft of personal property such as electronics, jewelry, or art
  • Loss of property used for business purposes in a disaster

You can deduct your casualty and theft losses on Schedule A, but keep thorough records of the damage, including receipts, appraisals, and photos. Consider working with a tax professional to maximize your claim and navigate the rules for more complex situations, especially if you are affected by a federally declared disaster.


note icon If you’ve been impacted by a disaster or theft, check if your area is included in a federal disaster declaration. It can significantly broaden the scope of losses that qualify for a tax deduction.


Other itemized deductions

There are also less common, miscellaneous personal expenses you can itemize. This includes gambling losses and federal estate tax on income. 

As for self-employed business expenses, the following qualify as deductions:

  • Advertising and promotion
  • Legal and professional fees
  • Business insurance
  • Home office
  • Business use of your car 

Be sure to keep these business expenses separate from your personal expenses, as you will need to distinguish between the two when filing your taxes. Please note that self-employed business expenses are deducted on Schedule C, not on Schedule A.

Pros and cons of itemized deductions

Of course, there are a few tax rules to consider before itemizing deductions. Depending on your unique situation, one type of deduction may work more in your favor than the other.

An illustration of the advantages and disadvantages of itemized deductions.

Pros of itemized deductions:

  • Potentially add up to more than the standard deduction, lowering your tax bill
  • Ability to claim more expenses 
  • Option for taxpayers of all tax brackets to claim


Cons of itemized deductions:


  • Adding up and recordkeeping individual claims takes more time and effort than taking a standard deduction.
  • Intricate rules to understand that typically require help from a tax professional
  • Requires sufficient documentation to back up your claims

Although it’s a time-consuming process, the extra steps required for itemized claims may be worth it for the amount of money you’ll save in taxes. 

How to claim itemized deductions

Since you can’t claim both standard and itemized deductions, figure out your adjusted gross income first to determine which one gives you the greatest deduction. If your itemized deductions exceed your standard deduction amount, you will claim all of your expenses on Schedule A (Form 1040) with your tax return. Here’s how:

  • List your deductions on their corresponding lines of your Schedule A.
  • Total them up.
  • Copy that total amount to the second page of the Form 1040.
  • Subtract this amount from your income to determine your final taxable income amount.

Make sure that you meticulously keep records, such as saving receipts and bank statements. You’ll also need to separate your business from your personal expenses since there’s a difference between self-employed deductions and those you can take as a normal taxpayer.

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Find peace of mind come tax time 

Itemizing deductions can lower your personal tax liability, and posting business deductions will decrease your taxes on business income. Both can be a huge help come tax filing season. If you have questions regarding personal vs. business itemized deductions, it’s best to ask a tax accountant or other tax professional. 


Remember, the most important part of taking deductions is keeping your receipts. Doing so ensures that your deductions are as accurate as possible in the event of an audit. 


Wading through receipts can be a headache. Fortunately, tools like Quickbooks Solopreneurs allow you to manage files, taxes, and more all in one place.

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Itemized deductions FAQ

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Marshall Hargrave
Marshall Hargrave is a financial writer with nearly two decades of experience in finance, investing, and tax industries. He’s helped create and edit content for the likes of Investopedia, RobinHood, Fortune, and Yahoo! Finance. He’s also supported startups and small businesses with accounting, bookkeeping, and budgeting and worked with various finance organizations like the Consumer Bankers Association and the National Venture Capital Association. Marshall is a former Securities & Exchange Commission-registered investment adviser with a bachelor's degree in finance from Appalachian State University.

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