If you are interested in taking advantage of itemized deductions on your federal tax return, you will want to know how to prepare Schedule A. Schedule A is a federal tax schedule that is used to report eligible deductions that can be itemized on an IRS Form 1040. This page will provide basic information for preparing the form, but you can find detailed instructions on the Internal Revenue Service website.http://www.irs.gov

Taxpayers have the option of taking either a standard deduction based on the filing status they use or using itemized deductions. Generally, a taxpayer should only itemize if the amount of their eligible deductions exceeds the standard deduction. To claim itemized deductions, a Schedule A must be completed.http://www.irs.gov/pub/irs-pdf/i1040sca.pdf

Some individuals may assume that they will not have enough qualifying expenses to itemize, but it is a good idea to check the form to find out exactly what deductions can be claimed. Many people may qualify to itemize just by using expenses such as charitable donations, home mortgage interest or medical expenses.

To prepare a Schedule A, you will need to take three steps. First, you must gather the information you'll need to complete the form. Then you will get a copy of the schedule. Finally, you prepare the form carefully and transfer the necessary figures to your federal tax return.

To begin preparing a Schedule A form, the first thing you need to do is take the time to get all of your essential information together. This will help you to save time once you start working on the form. Completing the schedule will require the following:http://www.irs.gov/pub/irs-pdf/f1040sa.pdf

1. Your full name as it appears on your Social Security card
2. Your Social Security number
3. The amount of your qualifying medical and dental expenses - These include amounts paid for doctor visits, prescription drugs, hospital stays and certain mental health examinations. Mileage back and forth to receive medical care can also be deducted.
4. State and local income taxes paid on the prior year's tax return
5. Real estate taxes paid
6. Home mortgage interest and qualifying points paid
7. Mortgage insurance premiums
8. Cash and noncash contributions to a qualified charitable organization
9. Property losses from disaster or theft
10. Unreimbursed employee business expenses, such as the cost of uniforms required for work, union dues, the cost of job-related education, etc.
11. Fees paid for the prior year's tax preparation
12. A copy of your current year federal tax return
    
    

You will use the amount of your federal adjusted gross income to calculate the total of your qualified expenses, so be sure to prepare your Form 1040 before you start on Schedule A. A few other expenses, such as gambling losses and federal estate taxes paid, may also be deducted. See the Schedule A instructions for more information about the kind of miscellaneous deductions that can reported on the form.http://www.irs.gov/pub/irs-pdf/i1040sca.pdf

Once you have the required information, your next step is to get a copy of the form. If you will be preparing your tax return via a tax preparation website or by using tax software, Schedule A can be selected from a list of available federal tax forms. Some tax programs will ask you a series of questions to see if you have deductions that qualify to be itemized.

To prepare the form on your own, you can download it for free from the IRS website along with detailed line by line instructions.http://www.irs.gov/pub/irs-pdf/i1040sca.pdf Once you download it, you can fill out the form on your computer or you can print it out and complete it by hand. If you choose to fill it out manually, be sure to use black ink and write clearly.

If you don't have access to the Internet, you can usually obtain a hard copy of the schedule and instructions from your local public library during tax season. You can also receive a hard copy of the form in the mail by requesting it directly from the Internal Revenue Service.http://www.irs.gov/formspubs/page/0,,id=10768,00.html

Once you get the schedule, begin by writing in your full name and Social Security number at the top of the form. If you are using a tax software program, this will usually be done for you as you proceed through the return.

At this point, it is a good idea to read the form instructions in their entirety. This will give you a good overview of what is involved in preparing the form. Separate your expenses by section to make sure you list them all before moving on to the next part. Total your qualified medical expenses and enter them on line 1. IRS Publication 502 has a complete list of the medical and dental expenses that can be claimed.http://www.irs.gov/pub/irs-pdf/p502.pdf

On line 2, enter the amount of your adjusted gross income as shown on Form 1040. Multiply this total by 7.5% and enter the amount on line 3. Then subtract this number from your eligible medical deductions and enter the total that remains on line 4. This is your total medical expense.http://www.irs.gov/pub/irs-pdf/f1040sa.pdf

Enter your state and local income taxes, real estate taxes, new vehicle taxes and other eligible taxes in the next section. The form instructions will detail the kinds of taxes that can be included in this section. On lines 10 through 14, enter the total of your home mortgage interest, points and mortgage insurance premiums paid. Most of these totals will be reported to you on Form 1098.

Use lines 16 through 19 to report cash and goods that have been donated to charitable organizations, such as churches, international charities and other recognized charities. Be sure to obtain a receipt for your donation or keep a copy of your bank statements to serve as proof of your claim. If you have any losses from theft or disaster, report these on Form 4684 and enter the total on line 20 of your Schedule A.

Lines 21 through 28 are used to deduct work-related expenses that you have paid without reimbursement, tax preparation fees and other eligible expenses. The schedule instructions provide more information as to the kind of the deductions that can be claimed on these lines.http://www.irs.gov/pub/irs-pdf/f1040sa.pdf

Once you complete the form, answer the questions on lines 29 and 30 to see if your total itemized deductions are limited by your adjusted gross income. In some cases, you may wish to claim them even if they do not exceed the standard deduction. If you have any questions about what method is best for your personal situation, ask a qualified tax professional.

The content in this page is not a substitute for professional financial advice. Please contact a finance professional before using the information presented here.