Itemized deductions are literally itemized entries for personal tax deductions on US Federal income tax calculation. Itemization is used as part of an audit trail, as well as part of the natural machinery of calculations. As deductions, they reduce the total amount of taxable income, (created by calculation of a preliminary gross figure) giving a breakdown of costs for each item. This actually a more efficient method of calculating deductions, and has the advantage of setting out areas of taxpayer expenses clearly in complex income tax returns. Deductions are calculated and itemized against a schedule of allowable deductions created by the Internal Revenue Service.