What is Itemized deductions?
In short
Itemized deductions are specific personal expenses that individuals can deduct instead of the standard deduction, such as medical expenses above a floor, state and local taxes up to a cap, home mortgage interest and charitable contributions.
Key takeaways
- Medical expenses are deductible only above 7.5% of adjusted gross income.
- From 2026, charitable deductions for itemizers are reduced by a floor of 0.5% of the contribution base, and the benefit is limited for taxpayers in the 37% bracket.
- Miscellaneous itemized deductions subject to the old 2% floor are permanently eliminated.
Where it's tested
REG: Individual Taxation: Adjustments & Deductions — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under the One Big Beautiful Bill Act, what is the state and local tax (SALT) deduction cap, and is it permanent?