There can be times that an itemized deduction is appropriate. Don't know if this actually applies to you or you just made a mistake. Pub 550:
How To Report Amortization (Taxable Bonds)
Subtract the bond premium amortization from your interest income from these bonds.
Report the bond's interest on Schedule B (Form 1040A or 1040), line
1. Under your last entry on line 1, put a subtotal of all interest
listed on line 1. Below this subtotal, enter the amortizable bond
premium allocable to the interest payments for the year and label this
amount "ABP Adjustment". Subtract this amount from the subtotal, and
enter the result on line 2.
Bond premium amortization more than interest.
If the amount of your bond premium amortization
for an accrual period is more than the qualified stated interest for
the period, you can include the difference in Other Miscellaneous
Deductions on Schedule A (Form 1040), line 28.
But your deduction is limited to the amount by
which your total interest inclusions on the bond in prior accrual
periods is more than your total bond premium deductions on the bond in
prior periods. Any amount you cannot deduct because of this limit can be
carried forward to the next accrual period.
Pre-1998 election to amortize bond premium.
Generally, if you first elected to amortize
bond premium before 1998, the above treatment of the premium does not
apply to bonds you acquired before 1988.
Bonds acquired before October 23, 1986.
The amortization of the premium on these bonds
is a miscellaneous itemized deduction not subject to the
2%-of-adjusted-gross-income limit.
Bonds acquired after October 22, 1986, but before 1988.
The
amortization of the premium on these bonds is investment interest
expense subject to the investment interest limit, unless you choose to
treat it as an offset to interest income on the bond.
Tom Young
