Standard Deduction vs Itemizing: 2024–2026 Tax Guide

If you're 65 or older, you get an additional amount ($1,950 for single filers, $1,550 per spouse for married couples). Blind filers get the same additional amount.

Standard Deduction vs. Itemizing: Quick Comparison

What Does Itemizing Mean?

Instead of taking the standard deduction, you can add up all your qualifying individual deductions on Schedule A (Form 1040) and use that total instead. You'd do this if your itemized deductions exceed the standard deduction; otherwise you're leaving money on the table.

Itemizing requires documentation for every deduction you claim. It's more work, but it can pay off significantly for the right situations.

Common Itemized Deductions (Schedule A)

Here are the major deductions you can claim when itemizing:

• State and local taxes (SALT): State income tax (or sales tax) plus property tax. The SALT deduction cap was raised from $10,000 to $40,000 starting in 2025 under the One Big Beautiful Bill Act ($20,000 if married filing separately). For 2026, the cap is $40,400. However, the higher cap phases out for incomes above $500,000 (MAGI), dropping back to $10,000 for high earners.
• Mortgage interest deduction: Interest on mortgage debt up to $750,000 (for mortgages originated after December 15, 2017). This is often the biggest single itemized deduction for homeowners; especially in the early years of a loan when interest payments are highest.
• Charitable contributions: Cash donations to qualified charities (up to 60% of your adjusted gross income, or AGI), plus the fair market value of donated property. Keep receipts for all donations over $250.
• Medical and dental expenses: Only the amount that exceeds 7.5% of your adjusted gross income (AGI). If your AGI is $100,000, only medical expenses above $7,500 count. This threshold makes medical deductions hard to claim unless you had a major medical event.
• Casualty and theft losses: Only from federally declared disasters, and only the amount exceeding 10% of AGI after a $100 floor per event.

Notice what's not on this list: unreimbursed employee expenses, tax preparation fees, and investment advisory fees. These were eliminated as itemized deductions by the Tax Cuts and Jobs Act (TCJA) starting in 2018.

When Does Itemizing Make Sense?

The math is simple: itemize when your total itemized deductions exceed the standard deduction. In practice, this usually requires a combination of:

• A mortgage with significant interest payments (especially in the first years of a loan)
• Property taxes plus state income taxes (now deductible up to $40,000 under the new SALT cap)
• Substantial charitable giving
• Large unreimbursed medical expenses (major surgery, chronic conditions, long-term care)

For a single filer in 2026, you need more than $16,100 in itemized deductions to benefit. For a married couple filing jointly, you need more than $32,200. The raised SALT cap ($40,000 for most filers) makes this easier to reach than it was under the old $10,000 limit — especially for homeowners in high-tax states who may now be able to deduct $20,000-$35,000 in SALT alone.

The SALT Cap: What Changed in 2025

The Tax Cuts and Jobs Act (TCJA) capped the state and local tax (SALT) deduction at $10,000 starting in 2018. This single change pushed millions of taxpayers in high-tax states from itemizing to the standard deduction.

The 2025 update: The One Big Beautiful Bill Act raised the SALT cap from $10,000 to $40,000 starting with 2025 tax returns ($40,400 for 2026). This is a major change that may make itemizing worthwhile again for taxpayers in high-tax states like California, New York, New Jersey, and Connecticut.

Income phaseout: The higher $40,000 cap applies to filers with modified adjusted gross income (MAGI) under $500,000 ($250,000 married filing separately). Above that, the cap phases down; and filers with MAGI above roughly $600,000 revert to the old $10,000 cap. If you're paying $8,000 in property tax and $15,000 in state income tax, your total SALT is $23,000; and under the new cap, you can deduct all of it (if your income is below the phaseout).

Check IRS Topic 503 for the latest on deductible taxes.

The Bunching Strategy

If you're close to the itemizing threshold but don't quite make it every year, consider bunching; concentrating deductible expenses into alternating years.

Here's how it works: instead of donating $8,000 to charity every year, donate $16,000 every other year. In the "bunching" year, your higher deductions push you past the standard deduction threshold and you itemize. In the off year, you take the standard deduction. Over two years, you get more total deductions than if you spread the giving evenly.

A donor-advised fund (DAF) makes this even easier. You can make a large donation to the DAF in one year (getting the full deduction that year) and then distribute grants to your favorite charities over multiple years. You front-load the tax benefit while spreading out the actual giving.

Qualified Charitable Distributions for Retirees

If you're 70 1/2 or older and have a traditional IRA, you can make qualified charitable distributions (QCDs) of up to $105,000 per year directly from your IRA to charity. This is powerful because:

• The distribution counts toward your required minimum distribution (RMD)
• It's excluded from your taxable income entirely
• You can still take the standard deduction on top of it

This is often better than itemizing charitable donations. You effectively get both the standard deduction and the tax benefit of the charitable giving. QCDs are one of the best tax moves available to retirees.

Why Most Filers Still Use the Standard Deduction

The near-doubling of the standard deduction in 2018 (from $6,350 to $12,000 for single filers, now $16,100 in 2026) made itemizing unnecessary for most Americans. Before the TCJA, about 30% of filers itemized. Under the old $10,000 SALT cap, that dropped to around 10%.

The 2025 SALT cap increase to $40,000 could shift this calculus. Homeowners in high-tax states who were previously locked out of itemizing by the $10,000 SALT cap may now find it worthwhile again. It's too early to know the exact impact, but tax professionals expect the share of filers itemizing to increase.

For renters without a mortgage, it's still almost impossible to exceed the standard deduction. But homeowners in states like California, New York, New Jersey, and Connecticut should re-run the numbers; the math may have changed in your favor.

That said, "most people take the standard deduction" doesn't mean you should without checking. Run the numbers every year because your situation changes; a new home purchase, a major medical event, or a year of generous giving could tip the balance.

Above-the-Line Deductions: The Best of Both Worlds

Some deductions reduce your adjusted gross income (AGI) whether you itemize or not. These "above-the-line" deductions are valuable because they reduce your AGI, which affects eligibility for other deductions and credits:

• Traditional IRA contributions (if eligible)
• HSA contributions
• Student loan interest (up to $2,500)
• Self-employment tax deduction (half of SE tax)
• Educator expenses (up to $300)

Max out your above-the-line deductions first, then decide between standard and itemized.

How to Decide Each Year

Here's a simple process:

1. Add up your SALT payments (state income tax or sales tax plus property tax), capped at $40,000 for 2025-2026 ($10,000 if MAGI exceeds $500,000).
2. Add your mortgage interest from Form 1098.
3. Add charitable contributions (cash and non-cash, with documentation).
4. Add qualifying medical expenses above 7.5% of your AGI.
5. Compare the total to your standard deduction amount for your filing status (see table above).

If your total exceeds the standard deduction, itemize. If not, take the standard deduction and save yourself the paperwork.

How Clarity Helps You Track Deductible Expenses

The hardest part of deciding whether to itemize isn't the math; it's gathering the numbers. Clarity can help by automatically tracking deductible expenses throughout the year:

• Mortgage interest: Connected accounts automatically capture interest payments from your lender
• Charitable contributions: Transactions to qualified charities are flagged and categorized
• Property taxes and SALT: Track your running total against the $40,000 cap (or $10,000 if above the income phaseout)
• Medical expenses: Categorize healthcare spending and compare against the 7.5% AGI threshold

When tax season comes, you'll know instantly whether itemizing saves you money; no shoebox of receipts required.

This article is for educational purposes and does not constitute tax advice. Consult a CPA or tax advisor for guidance specific to your situation. Standard deduction amounts are subject to annual IRS inflation adjustments; verify current figures at IRS.gov.

Bunching means concentrating deductible expenses (especially charitable donations) into alternating years. Instead of donating $8,000 every year, donate $16,000 every other year — itemize in the high year and take the standard deduction in the off year. A donor-advised fund (DAF) makes this easier by letting you claim the full deduction upfront while distributing grants over time.

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