In general, if your total itemized deductions exceed the standard deduction, you should itemize. This includes these situations:
- You do not qualify for the standard deduction, or the amount of the standard deduction is limited
- You pay interest and taxes on a home or personal property
- You have large, uninsured casualty or theft losses
- You have large, uninsured medical and dental expenses
- You have large, unreimbursed employee business expenses
- You make large contributions to qualified charities
Most deductions are subject to the 2% of adjusted gross income (AGI) rule. This means the sum of expenditures greater than 2% of your total AGI are deductible in the amount that exceeds the 2%. If you’re under 65, medical and dental expenses that are greater than 10% of your total AGI are deductible in the amount that exceeds the 10%. If either you or your spouse is 65 or older, you can deduct the amount that exceeds 7.5% of your AGI. The limitation for itemized deductions claimed on tax returns for tax year 2016 will begin with incomes of $259,400+ (Single), $285,350+ (Head of Household) and $311,300+ (married couples filing jointly).