- 1). Read the Schedule A instruction booklet published each year by the Internal Revenue Service (IRS). The booklet is available on the IRS website or anywhere tax forms are made available. The first page of the booklet will have a "What's New" section that outlines any payments you can deduct from your taxable income. Regulations change each year, so review the current year's booklet for the most up-to-date deductions.
- 2). Gather your receipts for any deductible medical and dental expenses, business expenses, state and local taxes, interest and tax-deductible contributions you made over the year. All the currently eligible deductions are listed at the front of the Schedule A instruction booklet.
- 3). Follow the current year's Schedule A booklet to enter applicable deductions on each line of Schedule A. For example, in 2010, you enter medical and dental expenses on line 1 of Schedule A. Local and state tax deductions are entered on line 5.
- 4). Fill out the tax deduction worksheet and the mortgage insurance premium deduction worksheet if applicable. Enter the amounts from these two worksheets on Schedule A. For 2010, the amounts are entered on lines 5b and 13.
- 5). Add up and enter all the lines from your Schedule A into the Itemized Deduction Worksheet found at the end of your instruction booklet. The worksheet will calculate your total itemized deduction amount.
- 6). Enter the amount from the Itemized Deduction Worksheet onto your Form 1040. The amount goes on line 38 of the 2010 form. If your itemized deduction amount is less than the standard deduction, then you can either enter the standard deduction on line 38 or check the box on line 30 and enter the smaller itemized deduction.
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