Itemized vs Standard Deduction 2026

What Is the Standard Deduction?

The standard deduction is a fixed dollar amount that reduces your taxable income. You can claim it without any record-keeping — it is built right into the tax forms. Most taxpayers use the standard deduction because it is the simpler option and often results in a lower tax bill than itemizing.

For the 2025 tax year (returns filed in 2026), the standard deduction amounts are:

Taxpayers who are age 65 or older or blind qualify for an additional standard deduction. For 2025, the additional amount is $1,950 for single and head of household filers and $1,550 for married filers. These amounts are added to the base standard deduction above. See our full Standard Deduction guide for complete details on additional amounts and inflation adjustments.

What Is Itemizing?

Itemizing means listing your actual deductible expenses on Schedule A (Form 1040) instead of taking the flat standard deduction. You add up all your qualifying expenses, and your total itemized deductions are subtracted from your adjusted gross income.

Common itemized deductions include:

• Medical and dental expenses — deductible to the extent they exceed 7.5% of your adjusted gross income
• State and local taxes (SALT) — including state income taxes, real estate taxes, and personal property taxes, capped at $10,000 combined
• Mortgage interest — interest on up to $750,000 of acquisition debt for your primary residence and one second home
• Charitable contributions — cash and property donations to qualified organizations, generally limited to 60% of your AGI for cash gifts
• Casualty and theft losses — only from federally declared disasters
• Gambling losses — deductible only up to the amount of gambling winnings reported as income

Standard Deduction vs Itemizing — Key Differences

When to Itemize

Itemizing makes financial sense when your total eligible expenses exceed your standard deduction amount. Consider itemizing if you have any of the following:

• You own a home with a mortgage. Mortgage interest is typically the largest itemized deduction. If you have a $400,000 mortgage at 6.5%, you will pay roughly $26,000 in interest your first year — well above the single standard deduction.
• You pay high state and local taxes. If your state income tax and property taxes total more than $10,000 (the SALT cap), you will still get the full $10,000 deduction.
• You make large charitable donations. Cash donations to qualified charities are deductible up to 60% of your AGI.
• You have significant medical expenses. If your medical costs exceed 7.5% of your AGI, the excess is deductible.
• You had casualty losses from a federally declared disaster (e.g., hurricane, wildfire, flood).

When to Take the Standard Deduction

The standard deduction is usually the better choice if you:

• Do not own a home or have a mortgage (renters typically have few itemizable expenses)
• Do not make large charitable contributions
• Live in a state with no income tax and have modest property taxes (Texas, Florida, Nevada, etc.)
• Have an AGI below the standard deduction — if your income is less than the standard deduction, you owe $0 federal tax either way
• Prefer simplicity — itemizing requires saving receipts, tracking expenses, and filling out Schedule A

Remember: about 87% of taxpayers take the standard deduction, and for many of them it saves more than itemizing would.

Itemized Deductions Explained

Medical Expenses (7.5% AGI Floor)

For a detailed list of qualifying expenses, the AGI floor calculation, and strategies for maximizing this deduction, see our Medical Expense Deduction guide. You can deduct unreimbursed medical and dental expenses for yourself, your spouse, and your dependents that exceed 7.5% of your adjusted gross income. Qualifying expenses include doctor visits, hospital stays, prescription medications, dental work, vision care, certain long-term care services, and health insurance premiums (if not paid with pre-tax dollars).

If you itemize, your charitable donations are also deductible. Learn more in our Charitable Donation Deductions guide.

Example: AGI of $80,000 and unreimbursed medical expenses of $12,000. Deductible amount = $12,000 − (7.5% × $80,000) = $12,000 − $6,000 = $6,000.

State and Local Taxes ($10K SALT Cap)

You can deduct state and local income taxes (or sales taxes if you choose) and real estate and personal property taxes. The combined total of these taxes is capped at $10,000 ($5,000 if married filing separately). You must choose between deducting state income taxes or state sales taxes — you cannot deduct both.

Mortgage Interest (Up to $750K Acquisition Debt)

Interest on mortgage debt used to buy, build, or substantially improve your home is deductible for your primary residence and one second home. For mortgages taken out after December 15, 2017, the limit is $750,000 of acquisition debt ($375,000 if married filing separately). Points paid to obtain a mortgage are also generally deductible over the life of the loan.

Charitable Contributions (Up to 60% AGI)

Cash donations to qualified 501(c)(3) organizations are deductible up to 60% of your adjusted gross income. Donations of appreciated property (stocks, real estate) are generally deductible at fair market value up to 30% of AGI. You must have documentation — a bank record or written receipt — for any cash donation, and a written acknowledgment from the charity for donations of $250 or more.

Casualty and Theft Losses (Federally Declared Disasters Only)

Personal casualty and theft losses are now only deductible if they result from a federally declared disaster. The loss is reduced by $100 per event and by 10% of your AGI. This change was made by the Tax Cuts and Jobs Act and applies through 2025. Casualty losses from federally declared disasters (e.g., hurricanes, wildfires, floods) are deductible without needing to itemize other deductions in certain cases.

Gambling Losses (Up to Winnings)

You can deduct gambling losses — including lottery tickets, casino losses, and race track losses — only up to the amount of gambling winnings you report as income. You must keep a log or diary of your gambling activity with dates, amounts, and locations.

The SALT Cap

The state and local tax (SALT) deduction cap was introduced by the Tax Cuts and Jobs Act of 2017 (TCJA). It limits the total deduction for state and local income taxes, real estate taxes, and personal property taxes to a combined $10,000 per return ($5,000 if married filing separately).

This cap has been a major factor in the decline of itemizing since 2018. Before the TCJA, there was no dollar limit on the SALT deduction, and taxpayers with high state taxes could deduct the full amount. The cap is scheduled to sunset after 2025, meaning it will revert to the pre-TCJA rules unless Congress extends it. However, as of the 2025 tax year, the $10,000 cap remains in effect.

Impact: A homeowner in California or New York with $15,000 in state income tax and $8,000 in property taxes could previously deduct the full $23,000. Under the SALT cap, they can only deduct $10,000 combined — a loss of $13,000 in potential deductions.

Mortgage Interest Deduction

The mortgage interest deduction allows you to deduct interest paid on debt secured by your home. Key rules:

• Acquisition debt limit: $750,000 for mortgages taken out after December 15, 2017 ($1,000,000 for older mortgages)
• Eligible homes: Your primary residence and one second home (e.g., vacation home)
• Types of debt: Purchase-money mortgages, refinancing (treated as acquisition debt up to the balance of the original mortgage), and home equity loans used to substantially improve the home
• Not deductible: Mortgage insurance premiums, home equity loan interest used for personal expenses (e.g., paying off credit cards), and interest on debt exceeding the limit

Example: A married couple takes out a $600,000 mortgage at 6.5% on their primary residence. Their first-year interest is approximately $39,000. Since the loan is under the $750,000 limit, all of this interest is deductible if they itemize. Combined with the $10,000 SALT deduction, they already have $49,000 in itemized deductions — well above the $30,000 MFJ standard deduction.

Charitable Donations

Charitable contributions are deductible only if you itemize on Schedule A. Key rules and limits:

• Cash donations: Deductible up to 60% of your adjusted gross income. Any excess can be carried forward for up to 5 years.
• Property donations: Clothing and household items must be in good used condition or better. Vehicles are generally limited to the sale price when sold by the charity.
• Appreciated assets: Donations of stocks, bonds, or real estate held for more than one year are deductible at fair market value (up to 30% of AGI).
• Documentation: For cash donations under $250, a bank record or written receipt suffices. For donations of $250 or more, you need a written acknowledgment from the charity. Non-cash donations over $500 require Form 8283.
• Quid pro quo: If you receive a benefit (e.g., dinner at a charity gala), you can only deduct the amount exceeding the fair market value of the benefit received.

Note: The temporary above-the-line charitable deduction (allowing a $300/$600 deduction without itemizing) expired after 2021. For 2025 and beyond, you must itemize to claim any charitable deduction.

Worked Example: Standard vs Itemizing

Let us compare both approaches for a married couple filing jointly in 2025 with the following financial profile:

In this example, itemizing saves this couple $2,480 compared to taking the standard deduction. The mortgage interest alone ($26,000) nearly covers the entire standard deduction, and the SALT cap and charitable donations push the total well over. However, if this same couple had no mortgage, their total itemized deductions would be only $15,000 — well below the $30,000 standard deduction — and they would be better off taking the standard.