Form 1040 Schedule A: Itemized Deductions (2014) – A Simple Guide

What Form 1040 Schedule A Is For

Schedule A is an attachment to your main tax return (Form 1040) that lets you claim itemized deductions instead of taking the standard deduction. Think of it as a detailed receipt book where you list specific expenses the government allows you to subtract from your income, potentially lowering your tax bill.

The form covers seven major categories of expenses: medical and dental bills, taxes you paid to state and local governments, interest on home mortgages, charitable donations, casualty and theft losses, job-related expenses your employer didn't reimburse, and certain other miscellaneous costs. You'll add up all these eligible expenses, and if the total exceeds your standard deduction amount, you'll save money by itemizing.

Most taxpayers benefit from the standard deduction—a fixed amount everyone can claim without paperwork. But if you had significant deductible expenses during the year—perhaps major medical bills, substantial mortgage interest, or generous charitable giving—Schedule A might reduce your taxes more effectively than the standard deduction. The IRS instructions make it clear: you should calculate both options and choose whichever gives you the larger deduction, because paying less tax is always the goal.

When You’d Use Form 1040 Schedule A

You'll file Schedule A alongside your regular Form 1040 when you submit your original tax return, typically by April 15 of the year following the tax year. For 2014 taxes, that deadline was April 15, 2015. If you file for an extension, you'd submit Schedule A with your complete return by the extended deadline, usually October 15.

Sometimes you might need to file Schedule A after your original return has already been processed. This happens when you realize you forgot to claim deductible expenses or made calculation errors. In these situations, you'll file Form 1040X (Amended U.S. Individual Income Tax Return) with a corrected Schedule A attached. You generally have three years from the original filing deadline to amend your return and claim additional deductions you initially missed.

You might also file an amended Schedule A if you receive corrected tax documents—perhaps your mortgage lender sends a revised Form 1098 showing different interest amounts, or you discover receipts for charitable donations you forgot to include. The IRS allows these corrections because they understand paperwork mistakes happen, as long as you make the corrections within the allowable timeframe.

Key Rules or Details for Tax Year 2014

Several important thresholds and limitations govern Schedule A deductions. For medical and dental expenses, you can only deduct amounts exceeding 10 percent of your adjusted gross income (the number on Form 1040, line 38). However, if you or your spouse was born before January 2, 1950, you get a break—your threshold drops to 7.5 percent, making more of your medical costs deductible.

High-income taxpayers face an additional challenge: if your adjusted gross income exceeded $152,525 (for married filing separately) or higher thresholds for other filing statuses, your total itemized deductions get reduced. This phase-out means wealthy filers lose some of their deduction benefits. For married couples filing jointly, the phase-out began at $305,050; for single filers, $254,200; and for heads of household, $279,650.

Home mortgage interest deductions come with strict rules. You can generally deduct interest on mortgages taken out after October 13, 1987, only if the total borrowed for buying, building, or improving your home doesn't exceed one million dollars. If you borrowed against your home for other purposes—like paying off credit cards or buying a car—you can only deduct interest on up to $100,000 of that debt. These limits get cut in half if you're married filing separately.

Charitable contributions require proper documentation. For any cash donation, no matter how small, you must keep a bank record (like a canceled check) or written communication from the charity. For any single contribution of $250 or more, you must obtain written acknowledgment from the charity before filing your return. Without this paperwork, the IRS can disallow your deduction entirely, even if you genuinely made the donation.

You cannot deduct the same expense twice. If you already claimed something as a business expense on Schedule C, for example, you cannot also include it on Schedule A. Similarly, you cannot deduct expenses that were reimbursed by insurance or your employer. The IRS instructions specifically warn against this ""double-dipping"" because it's a common audit trigger.

Step-by-Step (High Level)

Start by gathering all your receipts, statements, and tax documents for 2014. You'll need medical bills and insurance statements, mortgage interest statements (Form 1098), property tax bills, charitable donation receipts, and any other relevant paperwork. Having everything organized before you begin makes the process much smoother.

Next, work through each section of Schedule A sequentially. Begin with medical and dental expenses (lines 1-4), totaling your unreimbursed costs and applying the percentage threshold. Move to taxes you paid (lines 5-9), where you'll choose between deducting state and local income taxes or sales taxes—pick whichever gives you the larger deduction. You can use either actual receipts for sales taxes or the optional IRS tables that estimate your sales tax based on your income and family size.

Continue with interest expenses (lines 10-15), primarily focusing on home mortgage interest. If you received Form 1098 from your lender, transfer that information directly. Add charitable contributions (lines 16-19), being careful to separate cash gifts from non-cash donations. Most people skip lines 20-28 unless they experienced casualty or theft losses, had significant unreimbursed employee expenses, or had other miscellaneous deductions.

After completing all applicable lines, add up your total itemized deductions on line 29. This is where high-income taxpayers must apply the phase-out limitation using the worksheet in the instructions. If your income exceeded the thresholds mentioned earlier, your deduction gets reduced by the lesser of three percent of your excess income or 80 percent of certain deductions. Compare your final Schedule A total to your standard deduction amount for 2014, and claim whichever is larger on Form 1040, line 40.

Common Mistakes and How to Avoid Them

The most frequent error involves deducting expenses that aren't actually deductible. People commonly try to claim life insurance premiums, disability insurance, nonprescription medications (except insulin), cosmetic surgery for purely aesthetic reasons, and commuting costs to their regular workplace. These items simply aren't allowed, no matter how much they cost. Before claiming any expense, verify it appears on the IRS list of deductible items in the instructions or Publication 502 (for medical) and Publication 526 (for charitable giving).

Another widespread mistake is forgetting to reduce deductions by reimbursements. If your health insurance paid your doctor directly, you cannot deduct that portion—only what you paid out of pocket. Similarly, if you deducted medical expenses last year and received a reimbursement this year that you didn't report as income, you're making an error that could trigger an audit. The IRS computer systems match these payments, so accuracy matters.

Many taxpayers incorrectly calculate the medical expense threshold, either using the wrong percentage (10 percent versus 7.5 percent) or applying it to the wrong income number. The threshold applies to your adjusted gross income from Form 1040, line 38—not your taxable income or total income. Double-check your birth date and your spouse's to ensure you're using the correct percentage, and verify your math carefully.

Documentation failures cause countless denied deductions every year. Without proper records, your charitable contributions become worthless during an audit. The solution is simple but requires discipline: immediately write checks or use credit cards for charitable gifts (never cash without a receipt), and request written acknowledgment letters for any donation of $250 or more before you file your return. Keep these records for at least three years after filing.

High-income filers frequently forget to apply the itemized deduction phase-out, resulting in claiming too much and potentially facing penalties later. If your adjusted gross income approached or exceeded the thresholds ($152,525 for married filing separately, and higher for other statuses), you must use the Itemized Deductions Worksheet in the instructions. This calculation isn't optional—it's required.

What Happens After You File

Once the IRS processes your return with Schedule A attached, your itemized deductions reduce your taxable income, which determines your final tax bill. The IRS computers verify the information on your Schedule A against third-party reports they receive—Forms 1098 from mortgage lenders, Forms W-2 showing state tax withholding, and information returns from charities and other recipients of your payments.

If something doesn't match, you might receive a letter requesting clarification or additional documentation. These ""CP2000"" notices aren't accusations of wrongdoing—they're simply the IRS asking you to explain discrepancies. Respond promptly with copies of your records proving your claimed deductions. Most discrepancies get resolved easily when you provide proper documentation.

In some cases, you might receive a refund of expenses you deducted on a prior year's Schedule A—perhaps your county refunded an overcharge on property taxes, or your health insurance reimbursed expenses you'd already deducted. When this happens, you may need to report that refund as income on Form 1040, line 21, but only if the original deduction actually reduced your tax. The IRS provides detailed worksheets in Publication 525 to help you calculate how much, if any, of the refund becomes taxable.

If you discover errors after filing—maybe you found additional charitable receipts in a drawer or realized you calculated your medical expenses incorrectly—you can file an amended return using Form 1040X. Attach a corrected Schedule A showing the right figures, and explain the changes. You generally have three years from your original filing deadline to claim additional refunds through amendments.

FAQs

Can I deduct medical expenses I paid for family members who aren't my dependents?

Sometimes yes. You can deduct medical expenses you paid for anyone who was your dependent when you provided the care or when you paid the bills. You can also deduct expenses for someone who would have been your dependent except they earned too much income ($3,950 or more in 2014) or filed a joint return. For example, if you financially support your mother but she earned $4,000 and therefore isn't your dependent, you can still deduct medical bills you paid for her.

Should I deduct state income taxes or sales taxes?

You must choose—you cannot deduct both. Most people deduct income taxes because they're typically higher, but if you live in a state without income tax (like Texas or Florida) or made major purchases during the year (a car, boat, or home renovation), sales taxes might give you a bigger deduction. The IRS provides optional tables that estimate your sales tax based on your income and family size, or you can use your actual receipts if you saved them all year. Calculate both options and claim whichever is larger.

What records do I need to keep for charitable donations?

For every cash donation of any amount, keep a bank record (canceled check, credit card statement) or written communication from the charity showing the organization's name, date, and amount. For any single contribution of $250 or more, you must also get a written acknowledgment from the charity before filing your return. For non-cash donations exceeding $500 in total value, you'll need to complete Form 8283 with detailed descriptions. Without proper documentation, the IRS will disallow your deductions entirely if audited.

What happens if I get a refund of taxes or medical expenses I deducted last year?

If you receive a refund in 2014 for something you deducted on your 2013 Schedule A, you might need to report it as income on your 2014 return—but only if that deduction actually reduced your taxes. The IRS calls this the ""tax benefit rule."" If you took the standard deduction in 2013, or if your itemized deductions didn't exceed your standard deduction, you don't report the refund as income because you didn't benefit from it. Publication 525 includes worksheets to help you calculate the reportable amount.

Can I amend my return if I forgot to include deductible expenses?

Absolutely. Use Form 1040X (Amended U.S. Individual Income Tax Return) to correct your original return. Attach a corrected Schedule A showing all your deductions, including the ones you originally missed. Include copies of documentation supporting the newly claimed expenses. You generally have three years from your original filing deadline (or two years from when you paid the tax, whichever is later) to amend and claim a refund. The IRS typically processes amended returns within 8-12 weeks.

Do my itemized deductions get reduced if I earn too much money?

Yes, if your adjusted gross income exceeded certain thresholds in 2014. The phase-out began at $305,050 for married couples filing jointly, $279,650 for heads of household, $254,200 for single filers, and $152,525 for married filing separately. If your income exceeded these amounts, you must use the Itemized Deductions Worksheet in the instructions to calculate a reduced deduction. The reduction equals the lesser of three percent of income above the threshold or 80 percent of certain deductions. This phase-out primarily affects high-income taxpayers.

What expenses are commonly claimed but actually not deductible?

Many people mistakenly try to deduct life insurance premiums, disability insurance, health club memberships, nonprescription medications (except insulin), cosmetic surgery for appearance purposes, funeral expenses, commuting costs to their regular job, and political contributions. Additionally, you cannot deduct the cost of diet food (even if prescribed by a doctor for obesity), travel your doctor recommended for general health improvement, or imported drugs not approved by the FDA. Always verify an expense is specifically listed as deductible in the IRS instructions before claiming it.

This guide is based on official IRS instructions for the 2014 tax year. For complete details, see the 2014 Instructions for Schedule A and Schedule A form at IRS.gov.

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