Form 1040 Schedule A: Itemized Deductions (2020) - A Taxpayer's Guide
Schedule A is where you list specific expenses you paid throughout the year that the IRS allows you to subtract from your income before calculating your taxes. Think of it as showing your work when you believe claiming actual expenses (itemizing) will save you more money than taking the standard flat-rate deduction everyone gets automatically.
What Form 1040 Schedule A Is For
Schedule A (Form 1040) is the official IRS form you use to claim itemized deductions on your federal income tax return. The form lets you add up qualifying expenses in six main categories: medical and dental costs, taxes you paid, interest payments, charitable donations, casualty and theft losses, and certain other expenses. For the 2020 tax year, you would only file Schedule A if your total itemized deductions exceed your standard deduction—which was $12,400 for single filers, $24,800 for married couples filing jointly, and $18,650 for heads of household.
The basic principle is straightforward: you paid for certain things throughout the year (doctor visits, mortgage interest, property taxes, charitable donations), and the IRS allows you to deduct some of those costs to lower your taxable income. The form walks through each category with specific line items, asking you to calculate what portion of each expense type qualifies under IRS rules. At the end, you compare your total itemized deductions to the standard deduction and choose whichever gives you the bigger tax benefit.
When You'd Use Form 1040 Schedule A (Late or Amended)
Most taxpayers file Schedule A with their original tax return by the April deadline, but there are several situations where you might file it late or as part of an amended return. If you originally took the standard deduction and later realized your itemized deductions were actually higher, you can file an amended return using Form 1040-X along with a completed Schedule A. You generally have three years from your original filing deadline to amend your return and claim itemized deductions instead.
You might also need to file Schedule A late if you discover overlooked deductions after filing—perhaps you forgot about significant medical expenses, charitable donations, or property taxes you paid. Similarly, if you receive corrected tax documents (like a revised Form 1098 for mortgage interest) showing higher deductible amounts than you originally claimed, you would file an amended return with an updated Schedule A. According to IRS instructions, when amending to itemize deductions for a 2020 Form 1040, you must attach Schedule A showing the corrected itemized deduction amounts. The amended return process requires you to show what you originally reported, the changes you're making, and the corrected amounts, with Schedule A providing the detailed breakdown of your itemized deductions.
Key Rules or Details for Tax Year 2020
The most important rule governing Schedule A for 2020 is the 7.5% threshold for medical and dental expenses. You can only deduct the portion of your medical costs that exceeds 7.5% of your adjusted gross income (AGI). For example, if your AGI was $50,000 and you had $6,000 in medical expenses, you'd calculate 7.5% of $50,000 ($3,750), and you could only deduct the amount over that threshold—$2,250 in this case.
For state and local taxes, there's a significant limitation: the total deduction for state and local income taxes (or general sales taxes if you choose that instead), real estate taxes, and personal property taxes is capped at $10,000 ($5,000 if married filing separately). This means even if you paid $15,000 in state income taxes and $8,000 in property taxes, you can only deduct a combined total of $10,000. Importantly, you must choose between deducting state and local income taxes or general sales taxes—you cannot deduct both.
Home mortgage interest has specific rules depending on when you took out the loan. For mortgages taken out after December 15, 2017, you can deduct interest on up to $750,000 of debt ($375,000 if married filing separately) used to buy, build, or substantially improve your home. Different limits apply to older mortgages. Charitable contributions have percentage limits based on your AGI, with different caps for cash versus property donations. For 2020, you could potentially elect special provisions allowing temporary suspension of certain limits on cash charitable contributions.
Casualty and theft losses for personal property were only deductible in 2020 if they occurred in a federally declared disaster area. Documentation requirements are strict across all categories—you need receipts, bank records, written acknowledgments for donations of $250 or more, and other substantiation depending on the type of expense.
Step-by-Step (High Level)
Start by gathering all your receipts, statements, and documentation for potentially deductible expenses paid during 2020. Collect medical bills and insurance statements, tax bills for property and state/local income taxes, mortgage interest statements (Form 1098), charitable donation receipts, and records of other qualifying expenses. Before beginning Schedule A, have your completed Form 1040 through line 11 (Adjusted Gross Income) available, as several calculations depend on your AGI.
Begin completing Schedule A from the top, working through each section sequentially. Lines 1-4 cover medical and dental expenses; total all qualifying costs, then subtract any insurance reimbursements, and finally calculate the portion exceeding 7.5% of your AGI. Lines 5a-6 address taxes you paid—decide whether to claim state and local income taxes or sales taxes, add real estate and personal property taxes, and ensure your total doesn't exceed $10,000. Lines 8a-8e cover interest you paid, primarily home mortgage interest and points; the most common entries here are mortgage interest from your Form 1098. Lines 10-14 deal with gifts to charity, separating cash donations from property contributions. Line 15 covers casualty losses (rarely applicable for 2020 unless in a disaster area), and lines 16-17 handle other miscellaneous itemized deductions.
After completing all relevant sections, add up your total itemized deductions on line 17. Compare this total to your standard deduction for your filing status. If your itemized deductions are higher, you'll enter that amount on Form 1040, line 12. If your standard deduction is higher, you're better off not filing Schedule A at all and simply taking the standard deduction instead. This comparison is crucial—the entire purpose of Schedule A is to save money, and filing it only makes sense if it actually lowers your tax bill compared to the automatic standard deduction.
Common Mistakes and How to Avoid Them
One of the most frequent errors is double-deducting expenses that were already excluded from your income. If you paid health insurance premiums through your employer's cafeteria plan with pre-tax dollars (money taken out before calculating your wages), those premiums don't appear in box 1 of your W-2, which means they've already reduced your taxable income—you can't deduct them again on Schedule A. Similarly, if you're self-employed and claimed the self-employed health insurance deduction on Schedule 1, line 16, you must reduce the premiums you claim on Schedule A by that amount. The IRS instructions explicitly warn against this form of double-dipping.
Many taxpayers exceed the $10,000 cap on state and local taxes without realizing all three types—income (or sales) taxes, real estate taxes, and personal property taxes—count toward the same limit. You can't claim $10,000 in income taxes plus another $10,000 in property taxes; the total for all categories combined cannot exceed $10,000. Additionally, people often try to claim both state income taxes and sales taxes, but you must choose one or the other, not both. Check the box on line 5a if you're claiming sales taxes instead of income taxes.
For real estate taxes, only include amounts your mortgage company actually paid to the taxing authority in 2020, not the amount sitting in your escrow account. Similarly, only taxes that were assessed prior to 2021 and paid during 2020 are deductible. Some taxpayers tried to prepay their 2021 property taxes in December 2020, but if the tax hadn't been assessed by December 31, 2020, it doesn't count for your 2020 return.
Charitable contribution errors are common as well. If you received something in return for your donation (like a dinner at a fundraiser), you can only deduct the amount exceeding the fair market value of what you received. Keep written acknowledgments from organizations for any single contribution of $250 or more—but don't attach them to your return; keep them with your records in case of an audit. Also, don't combine separate small donations to reach the $250 threshold; each donation stands alone.
Finally, many taxpayers include personal interest (like credit card interest) or non-deductible insurance (like life insurance premiums) on Schedule A. Personal interest is not deductible; only qualified mortgage interest and investment interest (with limitations) can be claimed. Similarly, don't include penalties, interest charges on late tax payments, or assessment charges for property improvements (though maintenance assessments can qualify).
What Happens After You File
After you submit your tax return with Schedule A attached, the IRS will process your return and calculate your tax liability based on your itemized deductions. The key here is retention: even though you don't attach receipts or supporting documents to your return, you must keep detailed records of every expense you claimed. The IRS recommends keeping tax records for at least three years from the date you filed, though some circumstances require longer retention periods. Store bank statements, cancelled checks, receipts, written acknowledgments from charities, Form 1098s, property tax bills, and medical expense records in an organized file.
If the IRS questions any of your deductions, they may request substantiation through a correspondence audit or examination. You'll need to produce the documentation proving you paid the expenses you claimed. Lack of proper documentation can result in disallowed deductions, additional taxes owed, interest charges, and potentially penalties if the IRS determines the error was due to negligence.
If you receive a reimbursement in a future year for expenses you deducted on your 2020 Schedule A, you may need to report that reimbursement as income. For example, if you deducted medical expenses in 2020 and your insurance company pays you back in 2021, you'd typically include that reimbursement on your 2021 Schedule 1, line 8—but only if the original deduction actually reduced your 2020 tax. The same principle applies to state tax refunds if you deducted state income taxes.
Some deductions have carryover provisions. If you had more charitable contributions than you could deduct in 2020 due to AGI limitations, you can carry the excess forward for up to five years. Investment interest that couldn't be fully deducted may also carry forward. Track these carryovers carefully for future tax returns. The IRS provides specific guidance in publications like Pub. 526 for charitable contribution carryovers and Pub. 550 for investment interest carryovers.
FAQs
How do I know if I should itemize or take the standard deduction?
Calculate your total itemized deductions using Schedule A and compare that number to your standard deduction amount for 2020. The standard deduction was $12,400 for single filers, $24,800 for married filing jointly, $12,400 for married filing separately, and $18,650 for head of household. If your itemized deductions are higher than your standard deduction, use Schedule A. If they're lower, take the standard deduction instead and skip Schedule A entirely. Most people find the standard deduction saves them more, especially since it increased significantly under recent tax law changes.
Can I deduct medical expenses if I have insurance?
Yes, but only the portion you paid out of pocket that wasn't reimbursed by insurance, and only the amount exceeding 7.5% of your adjusted gross income. This includes deductibles, copays, coinsurance, and services not covered by insurance. You can also deduct insurance premiums you paid yourself (not through pre-tax payroll deductions), but you must reduce them by any self-employed health insurance deduction you claimed. Common deductible expenses include prescription medications, doctor visits, dental care, eyeglasses, medical equipment, and mileage driven for medical appointments (17 cents per mile for 2020).
What's the difference between claiming state income taxes and sales taxes?
You must choose one or the other; you cannot claim both. Most people claim state income taxes because they're usually higher, especially if you have significant income. However, if you live in a state with no income tax (like Florida, Texas, or Washington) or made major purchases during the year (like a car or boat), claiming sales taxes might save you more. The IRS provides optional sales tax tables to calculate your deduction, or you can add up actual receipts. Either way, remember the total for all state and local taxes—income or sales, plus property taxes—is capped at $10,000.
Can I deduct mortgage interest on a second home or vacation property?
Yes, mortgage interest on a qualified second home can be deductible, subject to the same debt limits as your primary residence. For mortgages taken out after December 15, 2017, the combined debt on your first and second homes cannot exceed $750,000 ($375,000 if married filing separately) for the interest to be fully deductible. The loan must have been used to buy, build, or substantially improve the home. If you rent out the second home for part of the year, different rules may apply. Home equity loan interest is only deductible if you used the borrowed money to substantially improve your home, not for other purposes like paying off credit cards or funding a vacation.
What documentation do I need to keep for charitable donations?
For any single cash donation of $250 or more, you must have a written acknowledgment from the charity showing the amount, date, and whether you received anything in return. For smaller cash donations, a bank record (cancelled check, credit card statement) or written receipt from the organization is sufficient. For non-cash donations like clothing or household goods, keep detailed records describing the items, their condition, and their fair market value. Donations of property valued over $500 require Form 8283, and items worth more than $5,000 typically need a qualified appraisal. Never attach acknowledgment letters to your tax return—keep them in your personal files in case the IRS asks for proof.
What if I forgot to claim something on my Schedule A?
You can file an amended return using Form 1040-X along with a corrected Schedule A showing the additional deductions. You generally have three years from the date you filed your original return (or two years from when you paid the tax, whichever is later) to amend and claim a refund. Attach the new Schedule A to Form 1040-X and explain the changes in Column C. Common overlooked items include charitable donations, medical expenses, or property taxes. Make sure the additional deductions actually increase your total itemized deductions enough to exceed the standard deduction—otherwise, amending won't help. The IRS typically processes amended returns in 8-12 weeks, though it can take longer during busy periods.
Are there any itemized deductions I can still claim if I take the standard deduction?
For the most part, no—you choose either the standard deduction or itemized deductions, not both. However, certain deductions aren't on Schedule A at all and can be claimed regardless of which method you use. These "above-the-line" deductions appear on Schedule 1 (Form 1040) and include things like student loan interest, self-employed health insurance, contributions to traditional IRAs, and educator expenses. For 2020, there was also a special $300 charitable contribution deduction for those taking the standard deduction (not on Schedule A), allowing a limited deduction for cash gifts to qualifying organizations even if you didn't itemize.
All information based on official IRS sources: 2020 Instructions for Schedule A and About Schedule A (Form 1040).
