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Itemized Deduction
Definition
Specific individual deductions claimed instead of the standard deduction to reduce taxable income.
Explanation
Taxpayers can itemize deductions (mortgage interest, state/local taxes up to $10,000, charitable donations, medical expenses) instead of taking the standard deduction. You itemize when total deductions exceed the standard deduction, which requires filing Schedule A.
Itemizing requires detailed record-keeping. The Tax Cuts and Jobs Act of 2017 significantly reduced the number of taxpayers who itemize by nearly doubling the standard deduction.
Example
Homeowner with $18,000 mortgage interest, $5,000 property tax, $3,000 charitable donations = $26,000 itemized deductions (better than $14,600 standard).