IRS Schedule A (Form 1040) (2012): Itemized Deductions

What is IRS Schedule A (Form 1040) (2012) for

IRS Schedule A (Form 1040) (2012) is the tax form used to report itemized deductions that reduce your taxable income. Instead of claiming the standard deduction, taxpayers can list specific deductible expenses such as medical and dental expenses, mortgage interest, charitable contributions, and state and local taxes. The form helps calculate total deductible expenses, which are then transferred to Form 1040 to determine the amount of federal income tax you owe or save for the tax year.

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When You’d Use IRS Schedule A (Form 1040) (2012)

You would use IRS Schedule A (Form 1040) (2012) when your eligible deductions provide greater savings than taking the standard deduction. 

1. Switching from the standard deduction: When your total deductible expenses, including medical and dental expenses or home mortgage interest, exceed your standard deduction, itemizing can reduce your taxable income and help you save money.
   
   
2. Filing an amended tax return: You may file Form 1040X if you later discover deductible expenses such as charitable contributions, real estate taxes, or interest paid that were missed on your original tax return. The total from Schedule A is entered on your IRS Form 1040 - U.S. Individual Income Tax Return.
   
   
3. Late or corrected filings: Taxpayers can file an amended return within three years of the original filing date to include newly found deductible expenses or correct prior errors.
   
   
4. Specific filing situations: Married couples filing jointly or married taxpayers filing separately may itemize deductions if doing so results in lower taxable income for the household.

Key Rules or Details for the 2012 Tax Year

The Internal Revenue Service established several rules in 2012 to help taxpayers correctly claim itemized deductions on IRS Schedule A (Form 1040) (2012).

1. Medical and dental expenses: You could only deduct qualified medical or dental expenses that exceeded 7.5% of your adjusted gross income, including insurance premiums, prescription costs, and transportation for medical care.
   
   
2. State and local taxes: Taxpayers were required to choose between deducting state and local income taxes or local general sales tax, but not both, when completing their tax form.
   
   
3. Home mortgage interest: You could deduct home mortgage interest on loans up to $1 million for your primary or secondary home, provided the debt incurred was used to buy, build, or improve the property.
   
   
4. Charitable contributions: Contributions made to a qualified charitable organization were deductible at their fair market value, but donations exceeding $250 required written acknowledgment.
   
   
5. Miscellaneous deductions: Job-related and investment interest expenses were deductible only if they exceeded 2% of your adjusted gross income for the tax year.
   
   
6. Filing status limitations: Married taxpayers filing separately were limited to a $500,000 cap on deductible home mortgage debt under the generation-skipping tax provisions.

Facing a penalty or late filing fee? Review your penalty abatement options.

Step-by-Step (High Level)

Filing IRS Schedule A (Form 1040) (2012) involves entering deductible expenses in seven major sections, each requiring proper documentation.

1. Medical and dental care: Add up all qualified medical and dental expenses exceeding 7.5% of adjusted gross income, including dental expense deduction, insurance premiums, and travel for treatment.
   
   
2. Taxes you paid: Report state and local taxes, real estate taxes, and customs duties or local general sales tax applied to your income or property.
   
   
3. Interest paid: Enter mortgage interest statement amounts from Form 1098, include prepaid interest or mortgage points, and deduct points related to a qualified mortgage loan.
   
   
4. Charity gifts: Report charitable contributions in cash or property and attach Form 8283 if the fair market value of non-cash gifts exceeds $500.
   
   
5. Casualty and theft losses: Complete Form 4684 to claim theft losses or property damage, ensuring the loss relates to a federally declared disaster area.
   
   
6. Job and miscellaneous expenses: Include unreimbursed business costs, tax prep fees, and other deductible expenses exceeding 2% of your adjusted gross income.
   
   
7. Total deductions: Add all sections together and enter the total on Form 1040 line 40 to calculate your total itemized deductions.

Common Mistakes and How to Avoid Them

Several frequent errors can reduce or delay the benefits of filing IRS Schedule A (Form 1040) (2012), but these issues can be avoided with careful review and documentation.

1. Forgetting AGI thresholds: Always apply the 7.5% and 2% adjusted gross income limits before claiming medical or miscellaneous deductions to ensure accuracy.
   
   
2. Deducting non-qualifying expenses: Do not include non-deductible items such as cosmetic procedures, social security taxes, or personal license fees under qualified medical expenses.
   
   
3. Missing required forms: Attach all necessary forms, including 2106 for employee expenses, 4952 for investment interest, or Form 8283 for charitable contributions, to prevent processing delays.
   
   
4. Double-claiming taxes: You may only deduct state income tax or general sales taxes; never claim both, and choose the one that provides the most savings.
   
   
5. Incorrect mortgage interest reporting: Report only the amount shown on your mortgage interest statement and adjust if you share a mortgage loan or claim a tax credit.
   
   
6. Overlooking reimbursements: Subtract any insurance reimbursements, employer payments, or refunds before entering medical or job-related expenses.
   
   
7. Simple math mistakes: Use reliable tax software or a calculator to verify all totals so that deductions lower your taxable income correctly.

What Happens After You File IRS Schedule A (Form 1040) (2012)

Once your tax return and IRS Schedule A (Form 1040) (2012) are submitted, the Internal Revenue Service reviews your entries for accuracy and confirms that deductions match your supporting documentation. Electronically filed returns are typically processed within 21 days, while mailed returns take about 6–8 weeks. Keep records of property taxes, mortgage loan documents, charitable receipts, and medical and dental care bills for at least three years in case of an audit or verification request.

Easily access your tax filing records with our IRS Account Transcript Service.

FAQs

Can I deduct home mortgage interest on more than one property?

Yes, you can deduct home mortgage interest on your primary residence and one secondary home if the total debt does not exceed $1 million for joint filers or $500,000 for married filing separately.

Are dental expenses deductible under IRS Schedule A (Form 1040) (2012)?

Yes, dental expenses are deductible as part of qualified medical expenses if they exceed 7.5% of your adjusted gross income and are not reimbursed by insurance or an employer plan.

What documentation is needed for charitable contributions?

Keep bank records or receipts for all charitable contributions, and a written, binding contract or acknowledgment from the charitable organization for donations of $250 or more. Non-cash contributions over $500 require Form 8283.

Can I deduct state and local taxes if I already paid the federal estate tax?

You can deduct state and local taxes, including property and income tax, but you cannot deduct any amount paid toward federal estate tax or federal unemployment tax.

What if I received income distributions or loan proceeds related to deductible interest?

Interest you paid may still qualify for a deduction if the debt incurred was used for a home mortgage loan or investment purpose; however, personal loan proceeds are not deductible under IRS rules.