Investments glossary

Itemized Deduction

An itemized deduction is an expenditure on eligible products, services, or contributions that can be subtracted from adjusted gross income (AGI) to reduce your tax bill. Such deductions permit taxpayers who qualify to potentially pay less in taxes than if they opted to take the standard deduction, a fixed dollar amount that varies only by filing status. Allowable itemized deductions, sometimes subject to limits, include such expenses as mortgage interest, charitable gifts, and unreimbursed medical expenses.

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