itemized deduction


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Itemized deduction

Specific deductions allowed by the IRS outlined in the tax return.

Itemized Deduction

A deduction from one's taxable income as the result of a specific expense the taxpayer has had over the course of the tax year. Most medical expenses, for example, may be deducted from one's taxable income. The same is the case for interest on mortgages and business expenses. The IRS allows itemized deductions as an alternative to the standard deduction, which takes a flat amount out of one's taxable income. Itemized deductions are subject to certain restrictions; for example, some expenses must exceed a certain percentage of the adjusted gross income to be deductible.

itemized deduction

See deduction.
References in periodicals archive ?
165(c)(3), an itemized deduction is allowed for a theft loss, but under Sec.
Nor is it subject to the section 67 itemized deduction threshold of 2% of AGI or the section 68 AGI phaseout of itemized deductions.
ii) An itemized deduction for state and local income taxes, plus a separate itemized deduction for qualified motor vehicle taxes (above and [paragraph] K-4518 et seq.
The following examples and discussion will demonstrate various favorable combinations and consider the effect of the itemized deduction and personal/dependency phaseouts.
This provision allows individuals, who previously were entitled to only a miscellaneous itemized deduction, to deduct their legal fees and court costs in arriving at adjusted gross income.
Once adjusted gross incomes go over the itemized deduction threshold, which is $150,500 for joint filers in 2006, taxpayers must reduce the itemized deductions they otherwise could take by 3 percent of the excess.
Furthermore, the expenses incurred by the employee, which are attributable to the amounts included in the employee's gross income, may only be deducted as a miscellaneous itemized deduction subject to the two-percent-of-AGI floor.
Be mindful of the phaseout of itemized deduction and personal exemption reductions.
Outside of the two-year window, the taxpayer must take a taxable distribution from the IRA and report the income; a donation is reported as an itemized deduction subject first to the charitable deduction limits, then to the itemized deduction phaseout.
Election to claim an itemized deduction for state and local taxes paid;
Once adjusted gross incomes go over the itemized deduction threshold, taxpayers must reduce the itemized deductions they otherwise could take by three percent of the excess.
An individual can include medical insurance costs with his/her other medical expenses (net of reimbursements) and claim the total of these expenses, subject to a limitation of 7-1/2 percent of adjusted gross income, as an itemized deduction on his/her personal income tax return.