Definition

Itemizing means adding up individual deductible expenses — such as mortgage interest, state and local taxes (capped), and charitable gifts — and deducting the total. It only makes sense when that total exceeds the standard deduction. High-cost homeowners and large donors are the most likely to benefit.

1. Standard Deduction

   A flat amount that reduces taxable income without itemizing.
2. Tax Deduction

   An expense that lowers the income you are taxed on.
3. Mortgage

   A loan used to buy property, secured by the property itself.