Arizona Form 140 Schedule A - Itemized Deduction Adjustments Instructions

Who Should Complete This Form?

You may itemize on your Arizona return, even if you do not itemize on your federal return. But, to itemize on your Arizona return, you must first complete a federal Schedule A. Use Form 140, Schedule A, to adjust the amount shown on the federalSchedule A. Complete Form 140, Schedule A, only if you aremaking changes to the amount shown on the federal Schedule A.

You must attach the federal Form 1040, Schedule A, to this form.

You must complete Form 140, Schedule A, only if any of the following items apply to you.

  1. You are deducting medical and dental expenses.
  2. You are claiming a federal credit (from federal Form 8396) for interest paid on mortgage credit certificates.
  3. You are deducting gambling losses while taking a subtraction for Arizona lottery winnings.
  4. Your deductions claimed on the federal Schedule A include expenses related to income not subject to Arizona tax.
  5. You are claiming an Arizona credit for any amount allowed as a charitable contribution.

If any of the above items apply to you, complete a federal Form 1040, Schedule A, and then complete Form 140, Schedule A, Itemized Deduction Adjustments, as instructed below.

Do not complete Form 140, Schedule A, if the above items donot apply to you. If you do not have to complete Form 140, Schedule A, enter the amount from federal Form 1040, Schedule A, on Form 140, page 1, line 18.

Line-by-Line Instructions

Skip lines 1 through 6 if you are not deducting medical and dental expenses.

In most cases, the deduction allowed on the Arizona return will be larger than the deduction allowed on the federal return. On your Arizona return, you do not have to reduce your medicalexpenses by a percentage of your federal adjusted gross income.

Complete lines 1 through 6 if you are deducting medical anddental expenses. In most cases, you may deduct more medicalexpenses on your Arizona return than you can deduct on your federal return. Complete lines 1 through 6 to deduct those expenses that were less than 10% (7.5% for age 65 and over) of your federal adjusted gross income. Also, complete lines 1 through 6 if you had a Medical Savings Account (MSA) or anArizona Long-Term Health Care Savings Account (AZLTHSA).

Line 1

Enter the total of your medical and dental expenses. Do not include any expenses that were paid by insurance or other sources. Do not reduce the amount you enter on line 1 byamounts paid from an MSA or an AZLTHSA.

Do not include insurance premiums you paid through anemployer-sponsored health insurance plan (cafeteria plan) unless your employer included the premiums in Box 1 ofyour Form(s) W-2. Also do not include any other medicaland dental expenses paid by the plan unless your employer included the amount paid in Box 1 of your Form(s) W-2. If you are self-employed, do not include any amount that you paid for health insurance that you deducted in computingyour federal adjusted gross income.

For details about what types of expenses you may deduct, seefederal Form 1040, Schedule A.

Line 2

Enter any amount of medical and dental expenses included online 1 that were paid from your MSA or AZLTHSA.

Lines 3 through 6

Complete lines 3 through 6 as instructed on the form.

Line 7

Skip line 7 if you are not claiming a credit for interest paid onmortgage credit certificates on your federal return.

If you claimed this credit on your federal return (using Form8396), you may deduct the amount of mortgage interest you paidin 2013 that is equal to the amount of that credit. Enter the amount of that interest on line 7.

Lines 8 through 12

Skip lines 8 through 12 if you are not deducting gambling losses.

You may deduct wagering losses only to the extent of yourwagering gains. You must complete lines 8 through 12 if both ofthe following apply:

  1. You took a subtraction for Arizona lottery winnings; and
  2. You are claiming a deduction for gambling losses. Complete lines 8 through 12 as instructed on the form.

Line 13

Skip line 13 if you are not taking any credit for an amountallowed as a charitable contribution.

You cannot claim both a deduction and a credit for the same charitable contributions. Enter the amount of charitable contributions for which you are taking a credit. For example:

If you claimed a credit on AZ Form: For contributions made to a: You must make an entry here if you deducted the amount contributed as an itemized deduction on federal Form 1040, Schedule A.
321 Qualifying Charitable Organizations
322 Contributions Made or Fees paid to Public Schools
323 Private School Tuition Organization
331 School Site Donation
340 Donation to Military Family Relief Fund
348 Certified School Tuition Organization

If you claimed a private school tuition credit on your 2012 returnfor a contribution that you made during 2013 (see Arizona Forms 323 and 348), you must make this adjustment on your 2013 return, even though you claimed the credit on your 2012 return.

If you are claiming a credit on your 2013 return for a contributionmade during 2014 (see Arizona Forms 323 and 348), you mustmake this adjustment on your 2014 return, even though you are claiming the credit on your 2013 return.

Line 14

You may not deduct any expense that relates to income notsubject to Arizona tax. You must complete line 14 if your federalSchedule A includes such expenses. Such expenses include:

  1. Interest or other related expenses incurred to purchase orcarry U.S. obligations, when the income is not subject to Arizona tax.
  2. State taxes paid to other states for prior years if you were notan Arizona resident for that prior year.
  3. Employee business expenses that relate to income not subject to Arizona tax.
  4. This list is not all-inclusive. There may be other items includedin your federal Schedule A that you cannot deduct on the Arizona return. Enter the amount of expenses deductible on federalSchedule A that are allocable to income that is not subject to Arizona income tax.

Lines 15 through 21

Complete lines 15 through 21 as instructed on the form.