• To itemize deductions, Schedule A must be filed with Form 1040.tax forms image by Chad McDermott from Fotolia.com
  
  The Internal Revenue Service allows individual income taxpayers a choice of reducing adjusted gross income by a preset amount, called the standard deduction, or by separately aggregating deductions in several categories, call itemized deductions. Taxpayers choosing to itemize deductions must file Schedule A, Itemized Deductions, when filing Form 1040, U.S. Individual Income Tax Return. There are several categories of deductions available on Schedule A.
  
  

Medical and Dental Expenses

• The IRS allows deductions of medical and dental expenses to the extent these expenses exceed more than 7.5 percent of a taxpayer's adjusted gross income. These expenses do not include pre-tax health insurance premiums paid by an employer or self-insured health insurance premiums deducted by the taxpayer in determining adjusted gross income.
  
  

State and Local Taxes

• Deductions are allowed on many forms of state and local taxes. Most commonly, these will be state income tax and state and local real and personal property taxes, which include taxes on homes and vehicles. General consumption taxes, such as sales tax, may only be deductible in lieu of income taxes.
  
  

Interest Expenses

• There are two types of allowable interest deductions, interest costs relating to qualified home mortgages and investment interest costs. Both deductions may be restricted by certain qualifying rules, most notably dollar-amount limitations on the size of a mortgage and restrictions requiring net investment income to deduct investment expenses.
  
  

Gifts to Charity

• Charitable contributions to qualified organizations are deductible subject to certain income restrictions. The IRS has a number of stringent documentation requirements regarding charitable contributions, particularly for non-cash contributions.
  
  

Casualty and Theft Losses

• The IRS allows deductions for uninsured casualty and theft losses to the extent these losses exceed 10 percent of a taxpayer's adjusted gross income plus $500. There are some exceptions, particularly for losses incurred in a location declared a federal disaster area.
  
  

2 Percent Miscellaneous Deductions

• The final category of itemized deductions is a catch-all basket with numerous, unrelated deductions. Many of these deductions are rarely claimed and esoteric. The more common deductions relate to unreimbursed business costs, job search costs, tax preparation fees, and certain retirement plan fees. Only miscellaneous deductions totaling more than two percent of a taxpayer's adjusted gross income may be claimed as an itemized deduction.