Key Takeaways

• The 2026 standard deduction is $15,750 (single) and $31,500 (married filing jointly) — made permanent by the OBBBA
• Only about 11% of taxpayers will itemize in 2026 — the doubled standard deduction makes it the right choice for most people
• You should itemize only if your qualifying deductions total more than your standard deduction amount
• The biggest itemizable deductions are: mortgage interest, state and local taxes (SALT, capped at $10,000), charitable contributions, and large medical expenses
• You can switch every year — there’s no penalty for using the standard deduction one year and itemizing the next

Table of Contents

1. What Is the Standard Deduction?
2. What Is Itemizing?
3. 2026 Standard Deduction Amounts
4. Which Common Expenses Can You Itemize?
5. When Itemizing Beats the Standard Deduction
6. The SALT Cap and Its Impact
7. How to Decide: A Step-by-Step Framework
8. Worked Example: Side-by-Side Comparison
9. FAQ

What Is the Standard Deduction?

The standard deduction is a flat dollar amount the IRS lets you subtract from your taxable income without needing to track or prove any specific expenses. It exists to simplify filing for the majority of Americans whose actual deductible expenses don’t add up to much.

When you take the standard deduction, you don’t need to save receipts for donations, calculate mortgage interest, or keep records of state taxes paid. You simply subtract the flat amount and calculate tax on whatever remains.

What Is Itemizing?

Itemizing means adding up all your qualifying individual deductions and deducting that total instead of the flat standard amount. You report each deduction on Schedule A of your federal return.

Itemizing takes more time and record-keeping, and only makes financial sense if your qualifying expenses actually exceed your standard deduction.

The key insight: you can only choose one or the other for any given tax year. You cannot take the standard deduction AND also deduct mortgage interest — it’s one or the other.

2026 Standard Deduction Amounts

The One Big Beautiful Bill Act permanently extended the doubled standard deductions from the Tax Cuts and Jobs Act, which were set to expire December 31, 2025.

Example — Married couple, both age 67:
$31,500 (base) + $1,600 (him) + $1,600 (her) = $34,700 total standard deduction without itemizing a single receipt.

Source: IRS Revenue Procedure 2025-32.

What Can You Itemize?

Only specific IRS-approved expenses qualify for Schedule A deductions. Here are the major categories:

1. State and Local Taxes (SALT)

You can deduct state income taxes (or sales taxes) AND property taxes combined — but capped at $10,000 ($5,000 if married filing separately). This cap was extended by the OBBBA through 2033.

For taxpayers in high-tax states like New York, California, and New Jersey, this cap is the single biggest reason itemizing often doesn’t make sense even for high earners.

2. Mortgage Interest

You can deduct interest paid on mortgages up to $750,000 in principal (loans originated after December 15, 2017). For older mortgages ($1 million limit), grandfathering applies.

Your lender will send you Form 1098 showing exactly how much interest you paid during the year.

3. Charitable Contributions

Cash donations to qualifying 501(c)(3) organizations are deductible up to 60% of your AGI. Non-cash donations (clothing, furniture, vehicles) have different rules and limits. You need written acknowledgment for donations of $250 or more.

4. Medical and Dental Expenses

Only the portion of medical expenses that exceeds 7.5% of your AGI is deductible. For most people, this is a very high bar.

Example: AGI of $60,000 × 7.5% = $4,500 floor. You can only deduct medical expenses above $4,500. If you spent $7,000 on medical costs, you can deduct $2,500.

Qualifying expenses include: insurance premiums (not employer-paid), out-of-pocket doctor/dentist/hospital costs, prescription drugs, long-term care insurance premiums, and certain home modifications for disability.

5. Casualty and Theft Losses

Only losses in federally declared disaster areas qualify under current law. These are rare for most filers.

6. Other Miscellaneous Deductions

• Gambling losses (up to gambling winnings)
• Impairment-related work expenses for disabled employees
• Most other miscellaneous deductions (job expenses, tax prep fees) were eliminated by TCJA and remain eliminated under OBBBA

When Itemizing Beats the Standard Deduction

Itemizing typically makes sense when you have one or more of these situations:

• Large mortgage: If you have a $400,000+ mortgage, your annual interest payment might easily exceed $15,000–$20,000 alone
• High property taxes: Homeowners in high-tax states paying $8,000+ in property taxes start getting close to the threshold when combined with other deductions
• Major medical year: A year with surgery, cancer treatment, or significant out-of-pocket costs may push medical deductions above the 7.5% AGI floor
• Large charitable giving: If you donate 10–15%+ of your income to charity, that alone can push you past the standard deduction
• High state income taxes + property taxes: Even with the SALT cap at $10,000, if you’re close to maxing it out plus have other deductions, itemizing may win

The SALT Cap and Its Impact

The $10,000 SALT cap introduced by TCJA was the single biggest change that pushed most homeowners away from itemizing. Before 2018, a homeowner in New Jersey paying $14,000 in property taxes + $8,000 in state income taxes = $22,000 in SALT deductions. After the cap, that’s capped at $10,000 — losing $12,000 in deductions.

For married couples in high-tax states, the SALT cap essentially makes itemizing pointless unless mortgage interest + charitable giving + medical expenses independently push you past $31,500.

The OBBBA extended the $10,000 cap through 2033 with a minor expansion: households earning under $400,000 (joint) may deduct up to $10,000; households over this threshold face a phased-out cap. Most middle-class taxpayers see no change.

How to Decide: A Step-by-Step Framework

Step 1: Add up your potential Schedule A deductions:

• SALT (capped at $10,000)
• Mortgage interest (check your Form 1098)
• Charitable contributions (total all receipts)
• Medical expenses above 7.5% of AGI

Step 2: Compare to your standard deduction amount

Step 3: Choose whichever is higher — that’s all there is to it

Most Americans will find their total itemized deductions fall well short of $15,750 (single) or $31,500 (married), making the standard deduction the obvious choice. The typical American homeowner’s situation:

For a single filer with $22,000 in itemized deductions vs. a $15,750 standard deduction — itemizing wins by $6,250. For a married couple with the same deductions vs. a $31,500 standard deduction — standard wins easily.

Worked Example: Side-by-Side Comparison

Scenario: Married couple, both work, income $120,000, homeowners in Texas (no state income tax)

Even with $14,500 in mortgage interest, the standard deduction wins for this Texas couple. Now change the state to New Jersey (high state income tax):

This illustrates why the SALT cap is so impactful — even in high-tax New Jersey, the standard deduction beats itemizing for this household.

FAQ

Can I itemize on my federal return and take the standard deduction on my state return?

It depends on your state. Some states decouple from federal rules and allow this. Many states have their own standard deduction that differs from the federal amount. Check with your state’s tax agency or a tax professional.

What records do I need if I itemize?

For each Schedule A deduction: Form 1098 (mortgage interest from lender), property tax statements, written acknowledgment letters for charitable donations over $250, and receipts/explanation of benefits for medical expenses. Keep these for at least 3 years.

Does the standard deduction vary if I’m blind or over 65?

Yes — you get an additional standard deduction amount on top of the base. In 2026, single filers 65+ get an extra $2,000; married filers 65+ get $1,600 per qualifying spouse. This makes itemizing even less likely to beat the standard deduction for older taxpayers. See Tax Brackets 2026 for the full table.

Should I itemize if I’m self-employed?

Your business expenses are deducted on Schedule C, not Schedule A — they reduce your income before the standard vs. itemized deduction decision. Self-employed people should almost always take Schedule C business deductions AND the standard deduction, unless they have significant personal itemizable deductions. See Self-Employment Tax Deductions 2026.

What if I’m not sure which is better?

Run the numbers both ways using tax software — every major program (TurboTax, FreeTaxUSA, H&R Block, IRS Direct File) will automatically calculate both options and recommend the one that saves you more. See How to File Taxes for Free in 2026.

Sources

1. IRS. Standard Deduction. IRS.gov.
2. IRS. Itemized Deductions. IRS.gov.
3. IRS Revenue Procedure 2025-32. 2026 inflation adjustments.
4. Tax Foundation. 2026 Tax Brackets and Federal Income Tax Rates. March 2026.
5. CBPP. Overview of the Tax Cuts and Jobs Act. Updated 2026.

Related Articles:

• 2026 Tax Brackets and Rates
• EITC 2026 — Income Limits & How to Claim
• Child Tax Credit 2026
• How to File Taxes for Free in 2026
• Self-Employment Tax Deductions 2026

Source: IRS Rev. Proc. 2025-32. Last verified: March 2026.