Which items are included in itemized deductions?

Itemized deductions are specific expenses that individuals can deduct from their taxable income, which may lead to a lower overall tax liability. Among the options presented, state and local taxes are definitively included in itemized deductions under Schedule A of the IRS tax return.

State and local taxes specifically encompass various categories, such as state income taxes or state sales taxes, property taxes, and certain foreign taxes. Taxpayers can choose to deduct either state income taxes or state sales taxes, but not both. This flexibility adds value to taxpayers as they can select the option that provides the maximum benefit based on their personal financial situations.

Mortgage premiums, while often significant in a homeowner's financial considerations, may not necessarily qualify as standard itemized deductions in every tax year, depending on legislative changes. Similarly, 401(k) contributions are classified as pre-tax contributions to retirement accounts and are excluded from taxable income, but they are not considered itemized deductions. Mortgage interest may qualify for itemized deductions, but where the question specifies "if interested," it implies a more subjective stance rather than a definitive categorization within standard itemized deductions.

Thus, state and local taxes stand out as a fundamental component of itemized deductions, making this choice the most accurate and relevant in the context