skip navigation

Search Help
Navigation Help


Main Topics
A B C D E F G H I
J K L M N O P Q R
S T U V W X Y Z #


FAQs
Forms
Publications
Tax Topics


Comments
About Tax Map

previous page Previous Page: Publication 17 - Your Federal Income Tax - Which Itemized Deductions Are Not Limited?
next page Next Page: Publication 17 - Your Federal Income Tax - Figuring Your Taxes and Credits
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pub17/p17-161.htm#en_us_publink100034729

How Do You Figure  
the Limit?(p203)


rule
spacer

If your itemized deductions are subject to the limit, the total of all your itemized deductions is reduced by the smaller of the following reduced by two-thirds:
Before you figure the overall limit on itemized deductions, you first must complete Schedule A (Form 1040), lines 1 through 28, including any related forms (such as Form 2106, Form 4684, etc.).
The overall limit on itemized deductions is figured after you have applied any other limit on the allowance of any itemized deduction. These other limits include charitable contribution limits (chapter 24), the limit on certain meal and entertainment expenses (chapter 26), and the 2%-of- adjusted-gross-income limit on certain miscellaneous deductions (chapter 28).
taxmap/pub17/p17-161.htm#en_us_publink100034730

Itemized Deductions Worksheet.(p204)


rule
spacer

After you have completed Schedule A (Form 1040) through line 28, you can use the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040) to figure your limit. Enter the result on Schedule A (Form 1040), line 29. Keep the worksheet for your records.
Deposit
You should compare the amount of your standard deduction to the amount of your itemized deductions after applying the limit. Use the greater amount when completing Form 1040, line 40. See chapter 20 for information on how to figure your standard deduction.
taxmap/pub17/p17-161.htm#en_us_publink100034732

Example(p204)


rule
spacer

For tax year 2008, Bill and Terry Willow are filing a joint return on Form 1040. Their adjusted gross income on line 38 is $259,600. Their Schedule A itemized deductions are as follows:
Taxes paid—line 9 $ 17,900
Interest paid—lines 10, 11, 12, and 13 45,000
Investment interest expense
—line 14
 41,000
Gifts to charity—line 19 21,000
Job expenses—line 27   17,240
Total $142,140
The Willows' investment interest expense deduction ($41,000 from Schedule A (Form 1040), line 14) is not subject to the overall limit on itemized deductions.
The Willows use the Itemized Deductions Worksheet in the Schedule A (Form 1040) instructions to figure their overall limit. Their completed worksheet is shown as Table 29-1.
Of their $142,140 total itemized deductions, the Willows can deduct only $141,143 ($142,140 − $997). They enter $141,143 on Schedule A (Form 1040), line 29. taxmap/pub17/p17-161.htm#w111
Pencil

Table 29-1. Itemized Deductions Worksheet—Line 29             

1.Enter the total of the amounts from Schedule A, lines 4, 9, 15, 19, 20, 27, and 28.1.142,140
2.Enter the total of the amounts from Schedule A, lines 4, 14, and 20, plus any gambling and casualty or theft losses included on line 28. Also include in the total any amount included on Schedule A, line 16, that you elected to treat as a qualified contribution for relief efforts in a Midwestern disaster area. 2.41,000
  Caution Be sure your total gambling and casualty or theft losses are clearly identified on the dotted lines next to line 28.  
3.Is the amount on line 2 less than the amount on line 1?    
  check box No. Stop reading here. This doen't apply to you Your deduction is not limited. Enter the amount from line 1 above on Schedule A, line 29.  
  Check Box Yes. Subtract line 2 from line 13.101,140
4.Multiply line 3 by 80% (.80)4.80,912  
5.Enter the amount from Form 1040, line 385.259,600  
6.Enter: $159,950 ($79,975 if married filing separately)6.159,950  
7.Is the amount on line 6 less than the amount on line 5?    
  check box No. Stop reading here. This doen't apply to you Your deduction is not limited. Enter the amount from line 1 above on Schedule A, line 29.    
  Check Box Yes. Subtract line 6 from line 57.99,650  
8.Multiply line 7 by 3% (.03)8.2,990  
9.Enter the smaller of line 4 or line 8 9.2,990
10.Divide line 9 by 1.510.1,993
11.Subtract line 10 from line 911. 997
12.Total itemized deductions. Subtract line 11 from line 1. Enter the result here and on Schedule A,
line 29
12.141,143
previous pagePrevious Page: Publication 17 - Your Federal Income Tax - Which Itemized Deductions Are Not Limited?
next pageNext Page: Publication 17 - Your Federal Income Tax - Figuring Your Taxes and Credits
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication