Do you actually have to itemize deductions or does it just improve your tax returns? I'm not eligible for any deductions so I have no idea how that works.
No, I don't have to. I could take the normal deduction that the government allows for mine and my wife's income bracket. This would work fine if I didn't have thousands in medical expenses. By itemizing, I end up with a larger deduction overall, which leads to more money back. It's not a huge difference in the end, as the gov only allows so much, but it's better than nothing.
Kind of like how I paid almost $9000 in childcare last year, but was only allowed to deduct 2500. They put limits on everything, which makes sense if you think about it. It's also why "poor" folks with more kids tend to get more money back. The system benefits those with little, and hammers everyone else.
I never do our taxes with the goal of getting money back. The true ideal is to be as close to 0 as possible. The only reason we have gotten anything back in the past 11 years is because of childcare/medical expenses. Combined we make "too much"(yeah, right) according to the government, to qualify for a lot of deductions. Hence, and we've come full circle here, itemizing.