Form 1040 Schedule A: Itemized Deductions (2018)
What Form 1040 Schedule A Is For
Schedule A is where you list your deductible expenses if you want to itemize deductions instead of taking the standard deduction. Think of it as a detailed receipt for all the qualifying expenses you paid during the tax year that the IRS allows you to subtract from your income. The form covers six main categories: medical and dental expenses, taxes you paid, interest you paid, gifts to charity, casualty and theft losses from federally declared disasters, and certain other deductions.
For 2018, you'd only file Schedule A if your itemized deductions add up to more than your standard deduction. The 2018 standard deduction amounts were $12,000 for single filers, $24,000 for married couples filing jointly, and $18,000 for head of household. If your deductible expenses exceed these amounts, Schedule A can lower your tax bill.
The 2018 tax year brought major changes to Schedule A through tax reform. The form became less beneficial for many taxpayers because several deductions were eliminated or limited. However, if you had substantial medical expenses, paid significant mortgage interest, made large charitable contributions, or paid substantial state and local taxes (up to the cap), itemizing could still save you money.
When You’d Use Form 1040 Schedule A (Late or Amended Filing)
You would use Schedule A when filing your original 2018 tax return if your itemized deductions exceeded your standard deduction. But what if you missed something or made an error?
If you discover after filing that you should have itemized when you took the standard deduction, or vice versa, you can file an amended return using Form 1040-X. Perhaps you forgot to include receipts for charitable donations you made, or you later received documentation for medical expenses you paid. You generally have three years from the date you filed your original return, or two years from the date you paid the tax (whichever is later), to amend your return.
When filing an amended return, you complete a new Schedule A with the correct information and attach it to Form 1040-X. The IRS notes that while many amended returns can now be filed electronically, you should still keep all supporting documentation. Processing an amended return typically takes longer than an original return—often several months—so patience is necessary.
You might also need to use Schedule A late if you filed for an extension and submitted your return after the April deadline. In this case, you'd simply include Schedule A with your Form 1040 when you file, just as you would have done if filing on time.
Key Rules or Details for 2018
The 2018 Schedule A came with significant rule changes that dramatically altered who could benefit from itemizing. Understanding these rules is essential to determining whether Schedule A makes sense for your situation.
The $10,000 State and Local Tax Cap: Perhaps the most impactful change was the limitation on state and local taxes. You could deduct a maximum of $10,000 ($5,000 if married filing separately) for the total of all state and local income taxes (or general sales taxes), real estate taxes, and personal property taxes combined. This cap affected many taxpayers, particularly those in high-tax states.
Medical and Dental Expenses Threshold: You could only deduct medical and dental expenses that exceeded 7.5 percent of your adjusted gross income. If your AGI was $50,000, for example, you'd subtract $3,750, and only amounts above that threshold would be deductible.
Mortgage Interest Limitations: The rules for deducting home mortgage interest became more restrictive. For mortgages taken out after December 15, 2017, you could only deduct interest on up to $750,000 of debt ($375,000 if married filing separately). Mortgages from before that date remained under the old $1 million limit. Additionally, interest on home equity loans was only deductible if you used the borrowed money to buy, build, or substantially improve your home—not for other purposes like paying off credit cards or funding a vacation.
Elimination of Miscellaneous Deductions: One of the most sweeping changes eliminated the entire category of miscellaneous itemized deductions. This included unreimbursed employee expenses, tax preparation fees, investment expenses, and union dues—all of which had previously been deductible if they exceeded 2 percent of your AGI. These became completely non-deductible for 2018.
Casualty and Theft Loss Restrictions: You could only deduct personal casualty and theft losses if they resulted from a federally declared disaster. Losses from non-declared events, such as a tree falling on your car or a burglary, were no longer deductible.
Charitable Contribution Rules: You could generally deduct charitable contributions, but you had to reduce your deduction if you received a state or local tax credit in return. The cash contribution limit increased to 60 percent of your adjusted gross income for most donations made by cash or check.
Step-by-Step (High Level)
Working through Schedule A follows a logical progression through the various categories of deductible expenses. Here's the general process:
First, gather your documentation. Collect receipts, statements, and records for all potentially deductible expenses. This includes medical bills, property tax statements, Form 1098 for mortgage interest, charitable donation receipts, and records of state and local taxes paid.
Start with medical and dental expenses (lines 1-4). Add up all qualifying medical and dental expenses you paid during the year. Calculate 7.5 percent of your adjusted gross income from Form 1040, line 7. Subtract that amount from your total medical expenses. Whatever remains is your deductible medical expense.
Move to taxes paid (lines 5-7). Determine whether to deduct state and local income taxes or general sales taxes—you can pick whichever is higher, but not both. Add your real estate taxes and personal property taxes. Remember, the total of all these taxes is capped at $10,000 ($5,000 if married filing separately).
Calculate interest paid (lines 8-10). Enter home mortgage interest from your Form 1098, mortgage insurance premiums if applicable, and investment interest. Follow the limitations on mortgage interest based on when you took out the loan and how much you borrowed.
Total your charitable contributions (lines 11-14). Separate cash donations from non-cash donations. For any single donation of $250 or more, you must have written acknowledgment from the charity. For non-cash donations exceeding $500, you'll need to attach Form 8283.
Include casualty and theft losses (line 15) if you had losses from a federally declared disaster, using Form 4684 to calculate the deductible amount.
Add any other itemized deductions (line 16) from the limited list of still-allowable deductions, such as gambling losses to the extent of gambling winnings, or certain unrecovered investments in a pension.
Total everything (line 17) and enter this amount on Form 1040, line 8. If your total is less than your standard deduction but you're itemizing for state tax purposes, check the box on line 18.
Common Mistakes and How to Avoid Them
Even with the simplified 2018 Schedule A, taxpayers frequently made errors that triggered IRS questions or reduced their legitimate deductions.
Double-dipping on deductions was a frequent error. Some taxpayers deducted medical insurance premiums on Schedule A while also claiming them as self-employed health insurance on Schedule 1, line 29. You must reduce Schedule A insurance premiums by any amount claimed elsewhere. Similarly, don't include expenses already deducted on business schedules like Schedule C, E, or F.
Including non-deductible insurance premiums caused problems. If your employer deducted health insurance premiums from your paycheck with pre-tax dollars (through a cafeteria plan), those amounts aren't in box 1 of your W-2 and can't be deducted again on Schedule A. This would be double-dipping on the tax benefit.
Forgetting the $10,000 state and local tax cap was common. Many taxpayers, especially those in high-tax states, simply added up all their state income taxes, property taxes, and local taxes without applying the $10,000 maximum. The IRS computer systems caught this error routinely.
Lacking proper documentation for charitable contributions led to denied deductions. For any cash donation, regardless of amount, you need a bank record or written acknowledgment from the charity. For donations of $250 or more, you must have a contemporaneous written acknowledgment from the organization before filing your return. For non-cash donations over $500, Form 8283 is required.
Trying to deduct eliminated miscellaneous expenses was surprisingly common in 2018. Taxpayers accustomed to deducting unreimbursed job expenses, tax preparation fees, or investment advisory fees attempted to claim them, not realizing these were completely eliminated.
Incorrectly calculating medical expense deductions happened frequently. Some forgot to subtract 7.5 percent of their AGI before claiming the deduction. Others included premiums paid through their employer's pre-tax plan or included non-deductible items like cosmetic surgery or over-the-counter medications.
Not understanding the home equity loan rules caused confusion. If you refinanced and took cash out for non-home purposes, or had an existing home equity line of credit used for other expenses, the interest wasn't deductible in 2018, even if it had been in prior years.
To avoid these mistakes, read the instructions carefully, keep meticulous records, and when in doubt, consult the IRS instructions at IRS.gov/ScheduleA or seek help from a tax professional.
What Happens After You File
Once you submit your Form 1040 with Schedule A attached, the IRS processes your return through several stages.
Initial processing involves the IRS computer systems checking your math and comparing information against third-party reports like Forms W-2, 1098, and 1099. If your mortgage interest deduction doesn't match what your lender reported on Form 1098, you may receive a notice asking for clarification.
Math error adjustments can happen quickly. If the IRS finds a calculation error—for example, you incorrectly added your deductions or forgot to apply the 7.5 percent threshold to medical expenses—they may correct it and send you a notice explaining the change and any resulting tax due or refund adjustment. You typically have 60 days to respond if you disagree with their correction.
Refund or balance due will be processed according to the figures on your return, including the itemized deductions from Schedule A. If you're due a refund, it generally arrives within 21 days if you e-filed and chose direct deposit. If you owe additional tax after applying your Schedule A deductions, you'll need to pay by the filing deadline to avoid penalties and interest.
Potential audits or examinations may occur if something on your Schedule A raises questions. Large charitable deductions relative to income, substantial casualty losses, or unusual deductions might trigger additional scrutiny. If selected for examination, you'll receive a letter requesting documentation for specific items. This is why keeping receipts, statements, and written acknowledgments is crucial—you should retain these records for at least three years after filing.
State tax implications may also follow. Many states use federal itemized deductions as a starting point for state returns, though some states have different rules. If you itemized on your federal return, you may need to itemize on your state return as well, or make adjustments for items that are treated differently.
If the IRS accepts your return without changes, you typically won't hear anything further. No news is generally good news. However, the IRS has three years from when you filed to audit your return, so keep your documentation until that period expires.
FAQs
Should I itemize or take the standard deduction for 2018?
You should itemize if your total deductible expenses on Schedule A exceed your standard deduction. For 2018, that's $12,000 for single filers, $24,000 for married filing jointly, and $18,000 for head of household. Calculate your potential itemized deductions first—including medical expenses (above 7.5 percent of AGI), taxes paid (capped at $10,000), mortgage interest, and charitable contributions. If the total is higher than your standard deduction, itemizing will reduce your tax bill. Some people itemize even when it's less beneficial because their state requires it or for other specific circumstances.
Can I deduct both state income taxes and sales taxes on Schedule A?
No, you must choose one or the other—you cannot deduct both. You can deduct either state and local income taxes or general sales taxes, whichever gives you the larger deduction, but remember the combined total for all state and local taxes (including real estate and personal property taxes) is capped at $10,000 ($5,000 if married filing separately). Most people in states with income tax deduct income taxes, while those in states without income tax typically deduct sales taxes. The IRS provides optional sales tax tables to help you calculate this if you don't have all your receipts.
What medical expenses are deductible, and which are not?
You can deduct payments for diagnosis, treatment, mitigation, or prevention of disease, including doctors, dentists, hospitals, prescription medications, insulin, medical equipment, health insurance premiums (with limitations), and even mileage to and from medical appointments (18 cents per mile in 2018). You cannot deduct over-the-counter medications (except insulin), cosmetic surgery (unless medically necessary), gym memberships, or the cost of diet food. Only the amount of medical expenses exceeding 7.5 percent of your adjusted gross income is deductible.
Do I need receipts for charitable donations, and how much documentation do I need?
Yes, documentation is essential. For any cash donation of any amount, you need a bank record (canceled check, credit card statement) or written receipt from the charity. For single contributions of $250 or more, you must have a contemporaneous written acknowledgment from the organization before you file your return—this cannot be just a canceled check. For non-cash donations valued at more than $500, you must complete and attach Form 8283. For non-cash donations over $5,000, you generally need a qualified appraisal. Without proper documentation, the IRS will disallow the deduction.
Why can't I deduct my work expenses on Schedule A for 2018?
The Tax Cuts and Jobs Act eliminated miscellaneous itemized deductions for 2018 through 2025. These included unreimbursed employee business expenses (such as uniforms, tools, union dues, and job-related travel), tax preparation fees, investment advisory fees, and safe deposit box fees. These had previously been deductible if they exceeded 2 percent of your adjusted gross income, but they became completely non-deductible starting in 2018. Some specific occupations have other ways to deduct work expenses, but for most employees, these deductions are suspended.
Can I still deduct interest on my home equity loan?
It depends on how you used the money. For 2018, home equity loan interest is only deductible if you used the borrowed funds to buy, build, or substantially improve the home that secures the loan. If you used a home equity loan or line of credit for other purposes—paying off credit cards, funding a vacation, paying college tuition, or buying a car—the interest is not deductible. This represents a significant change from prior years. Additionally, the total amount of qualifying home debt is limited to $750,000 ($375,000 if married filing separately) for loans taken out after December 15, 2017.
What should I do if I made a mistake on my Schedule A after filing?
File an amended return using Form 1040-X. Attach a corrected Schedule A showing the proper amounts. You generally have three years from the date you filed the original return to file an amendment. Include an explanation of what you're changing and why. Keep in mind that amended returns take longer to process—often several months—and you should include copies of any new documentation supporting your changes. If the amendment results in additional tax owed, pay it as soon as possible to minimize interest charges. If you're due a larger refund, the IRS will process it after reviewing your amended return.
Sources: All information in this guide comes from official IRS publications including the 2018 Schedule A (Form 1040), 2018 Instructions for Schedule A, and IRS.gov guidance on itemized deductions.
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