List of Tax Deductions on an Individual Return 1040

Because the IRS did not put deductions in one clean list. They scattered them across the return like a scavenger hunt designed by someone who hates humans.

So this post is my attempt to list all the deductions on a single location for individual returns:

First: how deductions actually work (this matters)

Before we list anything, you need to know this: Not all deductions work the same way.

On a 1040, deductions fall into four buckets:

1. Adjustments to income (reduce AGI — these are sneaky good)
2. Standard or itemized deductions (the big fork in the road)
3. Activity deductions (business, rental, farm stuff)
4. Statutory deductions (like QBI — not tied to expenses at all)

If you don’t know which bucket something lives in, taxes feel random.
They’re not random — they’re just poorly labeled.

1) The Standard Deduction (a.k.a. “most people stop here”)

You either:

• take the standard deduction, or
• itemize on Schedule A

You never do both. The IRS is many things, but it is not generous twice.
Most people take the standard deduction and move on with their lives.
If that’s you — congrats, you just skipped a lot of paperwork.

If you itemize, keep reading.

2) Itemized Deductions — Schedule A

(Only useful if they beat the standard deduction)

Medical & dental

• Medical and dental expenses above the AGI threshold (Schedule A does the math)

Taxes you paid (SALT)

• State & local income tax or sales tax (pick one)
• Real estate taxes
• Personal property taxes
• Other qualifying taxes (rare)

Interest you paid

• Mortgage interest and points (Form 1098 is usually involved)
• Investment interest (often comes with extra math)

Charitable contributions

• Cash donations
• Non-cash donations
• Carryovers from past generosity

Casualty & theft losses

• Only from federally declared disasters
• No, “my phone fell in the toilet” is not a federally declared disaster

Other itemized deductions (the “misc drawer”)

This is the IRS junk drawer where you’ll see:

• Gambling losses (limited to winnings)
• Claim-of-right repayments (when you repay income from a prior year)
• Federal estate tax on IRD
• Other niche items you’ll forget about until the next weird return hits your desk

3) Adjustments to Income (“Above-the-Line” Deductions)

Schedule 1, Part II

(These work even if you take the standard deduction — elite tier)

These reduce your income before taxable income is calculated, which is why they’re so valuable.

• Educator expenses — Deduct certain out-of-pocket classroom supplies if you’re an eligible teacher/educator.
• Certain business expenses (Form 2106) — Limited group of workers (reservists, performing artists, fee-basis officials) can deduct unreimbursed job expenses.
• HSA deduction (Form 8889) — Deduct contributions you make to a Health Savings Account if you’re eligible under an HDHP.
• Moving expenses (military only) — Only active-duty military moving under orders can deduct qualifying moving costs.
• Deductible part of self-employment tax (Schedule SE) — You get to deduct “the employer half” of SE tax to reduce taxable income (not SE tax itself).
• Self-employed retirement plans (SEP/SIMPLE/qualified plans) — Deduct contributions you make to your own self-employed retirement plan.
• Self-employed health insurance — If you’re self-employed and qualify, you can deduct health insurance premiums for yourself/your family.
• Penalty on early withdrawal of savings — If a bank hits you with an early withdrawal penalty, that penalty is deductible.
• Alimony paid (older agreements only) — Only deductible if your divorce/agreement falls under the pre-2019 rules.
• Traditional IRA deduction — Deduct eligible traditional IRA contributions (subject to income/coverage limits).
• Student loan interest deduction — Deduct up to the allowed cap of interest you paid on qualified student loans (income-limited).
• Archer MSA deduction — Deduct contributions to an Archer MSA (rare/legacy, but still exists for some).

“Other adjustments” (common examples)

• Jury duty pay turned over to employer — If you give your jury pay to your employer but still report it, this prevents double-taxing that income.
• Reforestation amortization/expenses — Special deduction rules for qualifying reforestation costs.
• Certain attorney fees — In specific cases (like certain claims/awards), attorney fees can be deductible above-the-line.
• Whistleblower award fees — Legal fees tied to whistleblower awards can qualify as an adjustment in certain situations.
• Foreign housing deduction (Form 2555) — If you qualify for foreign earned income rules, certain housing costs can be deductible.
• Certain K-1 excess deductions — Some pass-through/trust-related deduction items can flow through and land here.

4) Additional Deductions (New Kid on the Block — Schedule 1-A, Draft)

Draft 2025 forms introduced a new bucket because the IRS loves new buckets.

Currently includes items like:

• Qualified tips deduction
• Qualified overtime deduction
• Qualified passenger vehicle loan interest deduction
• Enhanced deduction for seniors

Translation: new line items for people to misunderstand confidently.

5) Qualified Business Income (QBI) Deduction — Section 199A

(The one you “see everywhere” at work)

QBI (Section 199A) is the deduction you see everywhere because it applies to a ton of pass-through income: Schedule C, partnership/LLC, S-corp, sometimes rentals, plus certain REIT/PTP income. It’s not an expense write-off—it’s basically a formula-based deduction that can be up to 20% of qualifying income.

Reality checks: it reduces taxable income (not AGI), it doesn’t reduce self-employment tax, and it’s computed on Form 8995 or 8995-A before landing right on the 1040—which is why it shows up constantly in real returns.

Business & Activity Deductions (Schedules C, E, F)

These don’t show up as one clean “deduction line.” Instead, they reduce income because you’re taxed on net results.

The simplest model is: income minus expenses = profit (or loss), and that number flows into the 1040 world.

Schedule C (Business / 1099)

• Income: money you made from the business
• Expenses: money you spent to run the business (ordinary/necessary)
• Vehicle: business mileage or actual auto costs (business %)
• Home office: business-use % of home costs (if you qualify)

Schedule E (Rentals)

• Income: rents/royalties received
• Expenses: costs to operate/maintain the property + mortgage interest + taxes + insurance + depreciation
• Vehicle: mileage for rental-related trips (if applicable)

Schedule F (Farming)

• Income: farm sales + farm-related income
• Expenses: farm operating costs + labor + supplies/feed/seed + repairs + interest + depreciation
• Vehicle/Equipment: business use of vehicles/equipment (as applicable)

Summary

Most of the time, your “deduction strategy” comes down to three questions:

1. Are you standard or itemizing? (Schedule A decides if your life gets annoying.)
2. Do you qualify for above-the-line adjustments? (Schedule 1 is the underrated VIP section.)
3. Do you have business/rental/farm activity? (Schedules C/E/F are where income gets taxed net, like it should.)

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