Schedule A (Form 1040) Itemized Deductions: 2012 Tax Year Guide
What the Form Is For
Schedule A (Form 1040) is the IRS form used to claim itemized deductions on your federal income tax return. Instead of taking the standard deduction—a fixed dollar amount that reduces your taxable income—Schedule A allows you to list (or "itemize") specific expenses you paid during the year that the IRS allows you to subtract from your income.
You would only use Schedule A if your total itemized deductions exceed your standard deduction. For 2012, the standard deduction amounts were: $5,950 for single filers, $11,900 for married couples filing jointly, $8,700 for heads of household, and $5,950 for married filing separately. If your qualifying expenses add up to more than these amounts, itemizing saves you money by reducing your taxable income further.
Schedule A covers seven major categories of deductions: medical and dental expenses (exceeding 7.5% of your adjusted gross income), state and local taxes, home mortgage interest, charitable contributions, casualty and theft losses, job-related expenses, and certain miscellaneous deductions. The form attaches to your main Form 1040 and requires you to provide detailed information about each category of expense you're claiming.
When You’d Use It (Late or Amended)
Most taxpayers file Schedule A with their original tax return by the April 15 deadline (or October 15 if they filed for an extension). However, there are situations where you might need to file Schedule A late or as part of an amended return.
If you initially took the standard deduction but later realize your itemized deductions would have saved you more money, you can switch by filing Form 1040X (Amended U.S. Individual Income Tax Return). You must attach a corrected Schedule A to your Form 1040X. Generally, you have three years from the original filing deadline to file an amended return claiming itemized deductions you missed.
Common Reasons for Amending
- Discovering you forgot to claim mortgage interest reported on a Form 1098 you received late.
- Finding receipts for charitable donations you overlooked.
- Learning about deductible medical expenses you didn’t know qualified.
- Correcting reimbursements for previously deducted expenses.
For certain foreign tax credits or deductions, the IRS allows up to 10 years to file Form 1040X. If you’re amending to switch from standard to itemized deductions (or vice versa), make sure this change is beneficial—tax software or a tax professional can help you calculate which option saves more money.
Key Rules for 2012
Understanding the 2012-specific rules helps you maximize your deductions while staying compliant. Here are the critical thresholds and limitations:
Medical and Dental Expenses
You could only deduct the portion exceeding 7.5% of your adjusted gross income (AGI). For example, if your AGI was $50,000, you could only deduct medical expenses above $3,750 ($50,000 × 7.5%). Qualified expenses included doctor visits, prescription medicines, hospital care, medical insurance premiums, and travel costs to medical appointments at 23 cents per mile.
State and Local Taxes
You had to choose between deducting state and local income taxes or general sales taxes—you couldn’t claim both. Most people chose income taxes, which included amounts withheld from paychecks, estimated tax payments made during 2012, and taxes paid with your 2011 state return. Real estate and personal property taxes were also deductible.
Home Mortgage Interest
Interest was deductible on mortgages up to $1 million used to buy, build, or improve your home ($500,000 if married filing separately). Home equity loan interest was deductible on up to $100,000 in debt, regardless of use. Your lender should have sent you Form 1098 showing the interest paid. Mortgage insurance premiums were also deductible in 2012.
Charitable Contributions
Cash and non-cash donations to qualifying charities were deductible.
- Donations of $250 or more required written acknowledgment.
- Non-cash donations over $500 required Form 8283.
- Only fair market value of goods could be deducted (not your time).
Miscellaneous Deductions
Job-related expenses, tax prep fees, and investment expenses were deductible only to the extent they exceeded 2% of AGI. Forms 2106 or 2106-EZ were required for job-related deductions.
Step-by-Step: How to Complete Schedule A (High Level)
Completing Schedule A requires gathering documentation and following a logical sequence through the form’s seven sections.
Step 1 – Medical Expenses (Lines 1–4)
- Add up all unreimbursed medical and dental expenses for yourself, spouse, and dependents.
- Subtract 7.5% of your AGI.
- Enter the result (if positive) on line 4.
Step 2 – Taxes (Lines 5–9)
- Choose to deduct either income taxes or sales taxes.
- Enter real estate and personal property taxes separately.
- Total on line 9.
Step 3 – Interest (Lines 10–15)
- Report home mortgage interest, points, and investment interest.
- Include lender details if interest not on Form 1098.
Step 4 – Charitable Gifts (Lines 16–19)
- List cash and non-cash donations.
- Attach Form 8283 if non-cash gifts exceed $500.
Step 5 – Casualty Losses (Line 20)
- Complete Form 4684 and enter the result on line 20.
Step 6 – Miscellaneous Deductions (Lines 21–27)
- Include unreimbursed employee expenses, tax prep fees, and other expenses exceeding 2% of AGI.
Step 7 – Other Deductions and Total (Lines 28–30)
- Add all sections and enter total deductions on line 29.
- Transfer total to Form 1040, line 40.
Common Mistakes and How to Avoid Them
Forgetting the AGI Thresholds
Medical and miscellaneous deductions apply only above certain AGI percentages—7.5% and 2%, respectively.
Deducting Non-Qualifying Expenses
Items like over-the-counter medicines, cosmetic surgery, and life insurance premiums aren’t deductible.
Missing Required Forms
Attach supporting forms:
- Form 8283 for non-cash donations
- Form 4952 for investment interest
- Form 2106 for employee expenses
Claiming Both Income and Sales Taxes
You must choose one—claiming both is a common error.
Incorrect Mortgage Interest Reporting
Only enter the interest amount from Form 1098 unless specified otherwise.
Overlooking Reimbursements
Only unreimbursed expenses qualify—exclude any amounts refunded or covered.
Math Errors
Use a calculator or software to verify totals.
What Happens After You File
Once you file your return with Schedule A attached:
- Processing time: ~21 days for e-filing or 6–8 weeks for paper.
- Corrections: IRS may fix math errors and send a notice.
- Documentation: Keep receipts and forms for at least 3 years.
If You’re Audited
Large deductions may trigger an audit, though the chance is under 1%. Keep organized digital or paper records for easy verification.
If You Need to Amend
File Form 1040X within three years if you need to correct or add deductions. Processing can take 8–12 weeks or longer.
FAQs
Should I itemize or take the standard deduction for 2012?
Compare your itemized deductions with your standard deduction. Itemize only if your total exceeds the standard deduction for your filing status.
Can I deduct medical expenses I paid for my adult child who isn't my dependent?
Yes, if you could have claimed them as a dependent except for income limits.
What if I received Form 1098 after filing my return without itemizing?
File Form 1040X with Schedule A attached to claim the missed deduction.
Can I deduct mortgage insurance premiums (PMI) on a 2012 loan?
Yes, for contracts issued after December 31, 2006, subject to AGI limits.
What documentation do I need for charitable donations?
Keep receipts, bank records, and acknowledgments. Form 8283 is required for donations over $500.
Can I deduct both state income tax and sales tax?
No—choose one. Use IRS sales tax tables if deducting sales taxes.
What unreimbursed employee expenses can I deduct?
Deduct union dues, licenses, required uniforms, or travel exceeding 2% of AGI. Meals and commuting costs don’t qualify.
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