Form 1040 Schedule A: Itemized Deductions (2016)
What Form 1040 Schedule A Is For
Schedule A (Form 1040) is the IRS form that allows you to itemize your deductions instead of taking the standard deduction when filing your federal income tax return. Think of it as a detailed list where you can claim actual expenses you paid throughout the year in specific categories, potentially reducing your taxable income more than the standard deduction would.
The form captures seven main types of deductible expenses: medical and dental costs, taxes you paid to state and local governments, interest on home mortgages and investments, charitable donations, casualty and theft losses, job-related expenses, and other miscellaneous deductions. For most taxpayers in 2016, itemizing makes financial sense only when the total of all these deductions exceeds their standard deduction amount—$6,300 for single filers, $12,600 for married couples filing jointly, or $9,300 for heads of household.
Schedule A attaches directly to your main Form 1040 and works as a supporting document. The total amount from Schedule A flows to line 40 of Form 1040, replacing what would otherwise be your standard deduction. The IRS designed this form so taxpayers can benefit from whichever approach—itemizing or standard deduction—results in lower taxes.
When You’d Use Form 1040 Schedule A (Including Late or Amended Returns)
You cannot file Schedule A "late" as a standalone document because it must accompany Form 1040, which has its own filing deadline (typically April 15 of the following year). However, if you filed your 2016 tax return by the deadline and later discover you should have itemized instead of taking the standard deduction—or vice versa—you can amend your return using Form 1040-X (Amended U.S. Individual Income Tax Return).
Common situations requiring an amended Schedule A include discovering overlooked medical bills, forgotten charitable donations, or additional state tax payments you made but didn't include on your original return. You might also need to amend if you receive a corrected Form 1098 showing different mortgage interest amounts, or if you claimed a deduction but later received a reimbursement that should reduce that deduction.
The IRS generally allows three years from your original filing date to file an amended return claiming a refund. For 2016 returns filed by April 18, 2017, you typically would have until April 18, 2020, to amend. You file Form 1040-X with a corrected Schedule A attached, explaining what changed and why. If you're switching from standard deduction to itemized deductions (or the reverse), you recalculate your entire tax liability with the new deduction method.
Key Rules or Details for 2016
The 10% Rule for Medical Expenses
You can only deduct medical and dental expenses exceeding 10% of your adjusted gross income. However, if either you or your spouse was born before January 2, 1952, you qualify for a more generous 7.5% threshold. For someone with $50,000 adjusted gross income under age 65, only medical expenses above $5,000 are deductible.
The Choice Between State Income Tax and Sales Tax
You must choose between deducting state and local income taxes OR general sales taxes—you cannot claim both. Most taxpayers benefit from the income tax deduction, but residents of states without income tax (like Texas or Florida) would choose sales tax. You can use either your actual sales tax receipts or the IRS's optional sales tax tables.
Mortgage Interest Limits
You can deduct mortgage interest on loans up to $1 million used to buy, build, or improve your main home and second home (or $500,000 if married filing separately). For home equity loans used for other purposes, the deduction limit is $100,000 ($50,000 married filing separately). Mortgages taken out after October 13, 1987, face these limitations, while earlier mortgages are generally fully deductible.
The 2% Floor for Miscellaneous Deductions
Job-related expenses and other miscellaneous deductions must exceed 2% of your adjusted gross income before any amount is deductible. With $60,000 adjusted gross income, only miscellaneous expenses above $1,200 count toward your itemized deductions.
High-Income Limitation
If your adjusted gross income exceeded $155,650 in 2016, your total itemized deductions may be reduced through a phase-out calculation detailed in the IRS instructions. This means wealthy taxpayers lose some of the benefit from itemizing.
Step-by-Step (High Level)
Start with medical expenses
Start with medical expenses by totaling all qualifying costs—doctor visits, hospital bills, prescription medications, dental work, eyeglasses, and health insurance premiums you paid with after-tax dollars. Don't forget mileage (19 cents per mile) for medical travel. Reduce this total by insurance reimbursements, then compare it to your adjusted gross income threshold.
Calculate your tax deductions
Calculate your tax deductions by choosing between state income taxes or sales taxes. Add state and local income taxes withheld from your paychecks (shown on your W-2), estimated tax payments made during 2016, and any prior-year taxes paid in 2016. Include real estate taxes on your home and personal property taxes based on the value of vehicles or boats.
Figure your interest deductions
Figure your interest deductions using Forms 1098 received from your mortgage lenders. If you paid interest not reported on Form 1098—perhaps to a private party—enter it separately with the recipient's information. Add any points paid on a home purchase or refinancing, mortgage insurance premiums, and investment interest (which may require Form 4952).
Total your charitable contributions
Total your charitable contributions, separating cash donations from non-cash gifts. Any single donation of $250 or more requires written acknowledgment from the charity. Non-cash donations exceeding $500 require Form 8283 with detailed descriptions. Remember, you can only deduct donations to qualified organizations, not political contributions or gifts to individuals.
Add remaining deductions
Add remaining deductions including casualty and theft losses (requiring Form 4684), unreimbursed employee business expenses (requiring Form 2106 or 2106-EZ), tax preparation fees, and safe deposit box rental if used for investment documents. Apply the 2% floor calculation to miscellaneous expenses.
Apply the high-income limitation
Apply the high-income limitation if your adjusted gross income exceeded $155,650, using the worksheet provided in the instructions to reduce your total itemized deductions.
Common Mistakes and How to Avoid Them
Double-dipping deductions
One frequent error is claiming expenses on Schedule A that you've already deducted elsewhere. If you claimed the self-employed health insurance deduction on Form 1040 line 29, you must reduce the medical insurance premiums on Schedule A by that amount. Similarly, don't claim business expenses on Schedule A if they belong on Schedule C for your business.
Deducting pre-tax insurance premiums
You cannot deduct health insurance premiums your employer paid or that you paid through a cafeteria plan with pre-tax dollars, because these amounts aren't included in your W-2 box 1 wages. Only premiums you paid with after-tax money qualify.
Forgetting reimbursements
If you received insurance reimbursement for medical expenses in the same year you paid them, you must subtract the reimbursement before calculating your deduction. If you receive reimbursement in a later year for expenses you previously deducted, you may need to report it as income on your next return.
Claiming non-deductible taxes
Federal income taxes, social security taxes, license fees (driver's license, marriage license, pet licenses), and certain local assessments for property improvements don't qualify as deductible taxes. Read your property tax bill carefully—portions covering trash pickup or sidewalk construction may not be deductible.
Missing documentation requirements
Keep detailed records and receipts for all deductions. For charitable donations of $250 or more, obtain written acknowledgment before filing. For non-cash donations over $5,000, you typically need a qualified appraisal. Without proper documentation, the IRS can disallow your deductions entirely.
Ignoring the AGI thresholds
Many taxpayers list all their expenses without applying the percentage-of-income thresholds. Medical expenses only count above 10% of AGI, and miscellaneous deductions only count above 2% of AGI. Calculate these thresholds first to avoid disappointment.
What Happens After You File
Once you submit your Form 1040 with Schedule A attached, the IRS processes your return through automated systems that check for mathematical errors and compare your deductions against statistical norms for taxpayers with similar income levels. Most returns process without issue, and you'll receive your refund (if owed) within 21 days for electronically filed returns or six weeks for paper returns.
Your itemized deductions may trigger additional scrutiny if they appear unusually high relative to your income. The IRS uses a Discriminant Function System that scores returns based on the likelihood of reporting errors. High itemized deductions don't automatically cause an audit, but disproportionate deductions increase your selection probability.
If the IRS has questions about your Schedule A, you'll receive a letter requesting documentation—typically Form 1098s for mortgage interest, acknowledgment letters from charities, or receipts for medical expenses. Respond promptly with copies (never originals) of requested documents. The IRS may accept your documentation and close the inquiry, make adjustments to your return and bill you for additional tax owed, or in rare cases, schedule an in-person audit.
Keep all supporting documentation for Schedule A for at least three years after filing. This includes receipts, canceled checks, bank statements, acknowledgment letters from charities, property tax bills, Forms 1098, and mileage logs. In some circumstances—such as if you substantially underreport income—the IRS can examine returns up to six years back.
If you later discover errors on your Schedule A, you can file Form 1040-X to amend your return within three years of the original filing date. If the amendment results in a larger refund, you'll receive the additional amount with interest. If you owe more tax, you'll also owe interest on the underpayment from the original due date.
FAQs
Should I itemize or take the standard deduction?
Itemize only if your total Schedule A deductions exceed your standard deduction. For 2016, standard deductions were $6,300 (single), $12,600 (married filing jointly), $9,300 (head of household), and $6,300 (married filing separately). Add up your potential itemized deductions before deciding. If you're close to the threshold, remember that itemizing requires keeping detailed records and typically takes longer to prepare.
Can I switch from standard deduction to itemized deductions after filing?
Yes, by filing Form 1040-X within three years of your original filing date. Many taxpayers discover additional deductible expenses after filing or realize their itemized deductions exceed the standard deduction. The amendment process lets you recalculate your tax with itemized deductions instead.
What happens if my spouse and I file separately—can one of us itemize while the other takes the standard deduction?
No. If you're married filing separately and one spouse itemizes deductions, the other spouse must also itemize, even if their itemized deductions are less than the standard deduction. This rule prevents couples from gaining an unfair tax advantage by dividing their deductions strategically.
Do I need to attach receipts and documentation to Schedule A when I file?
Generally no. You list your deductions on Schedule A but don't send supporting documentation unless the IRS specifically requests it. However, you must keep all receipts, acknowledgment letters, Forms 1098, and other documentation for at least three years in case of IRS inquiry. For non-cash charitable donations over $500, you do attach Form 8283.
Can I deduct medical expenses I paid for my parents or adult children?
Yes, if you provided over half their support, even if they're not your dependent because they had too much income or filed jointly. You can also deduct expenses for your child who would be your dependent except that your divorced spouse claims them. The person must meet specific relationship and support tests detailed in IRS Publication 502.
What if I receive a property tax refund or insurance reimbursement next year for expenses I deducted this year?
If you receive a refund or reimbursement in a later year for expenses you deducted and that deduction reduced your tax, you must report the refund as income on next year's Form 1040 line 21. If the deduction didn't actually reduce your tax (because you hit the standard deduction anyway or had no tax liability), you don't report it as income.
Are home improvement special assessments deductible as real estate taxes?
No. Special assessments that increase your property value—like installing new sidewalks, streets, or sewer systems—aren't deductible as taxes. Instead, they add to your home's cost basis. You can deduct assessments only if they're for maintenance of existing infrastructure or for general community services, which is rare for special assessments.
Sources
Sources: All information comes exclusively from official IRS publications: 2016 Instructions for Schedule A (Form 1040), 2016 Form 1040 Schedule A, and related IRS guidance available at IRS.gov/schedulea.
