Calculating the Allowable Portion (continued)

Case Study (continued)

Take a moment to review the allowable portions of Juan and Judith’s itemized deductions and their Schedule A.

Expense	Amount	Allowable Portion of Deduction
Medical and dental expenses	$3,457	($39,780/$59,300) x $3,457 = $0*
Real estate taxes	$1,200	($39,780/$59,300) x $1,200 = $805
Mortgage interest on their home	$9,480	($39,780/$59,300) x $9,480 = $6,359
Charitable contributions (cash)	$2,086	($39,780/$59,300) x $2,086 = $1,399
*Medical expenses must exceed 7.5% of adjusted gross income.

Think about it: Based on Juan and Judith’s information, they can claim either the allowable portion of the itemized deduction $8,563 or the allowable portion of standard deduction $19,587 ($29,200 x 0.6708), whichever is greater.

If you elect to itemize deductions even though they are less than standard deduction, check the box on line 18 of Schedule A.