Standard vs. itemized deductions

Every filer can lower taxable income with either the standard deduction, a flat amount set by filing status, or itemized deductions, the total of specific expenses listed on Schedule A. You can't take both, so the rule is simple: take the larger one.

The amount to beat in 2026

The standard deduction is higher at 65 or older or if you are blind, which raises the bar for itemizing.

What you can itemize

• State and local taxes (SALT): state income tax or sales tax, plus property tax, up to $40,400 for 2026 ($20,200 married filing separately), reduced for modified AGI over $505,000.
• Home mortgage interest on your main home and a second home, from Form 1098.
• Gifts to charity, in cash or property, to qualified organizations.
• Medical and dental expenses above 7.5% of your adjusted gross income.
• Casualty and theft losses from a federally declared disaster, and a few other items.

Some deductions don't depend on this choice: adjustments to income such as IRA or HSA contributions reduce AGI either way, and the qualified business income deduction and the senior deduction come on top of both.

Worked example

A married couple filing jointly in 2026 with $150,000 of AGI paid $14,000 of mortgage interest, $13,000 of state income and property taxes, gave $4,000 to charity and had $9,000 of medical bills.

• Medical: only the part above 7.5% of AGI ($11,250) counts, so $0.
• State and local taxes: $13,000, within the $40,400 cap.
• Total itemized: $14,000 + $13,000 + $4,000 + $0 = $31,000.

Their standard deduction is $32,200, so they should take the standard deduction: the difference of $1,200 changes their taxable income by that much, worth about $264 at their 22% bracket.

To see the tax on your own numbers, use the income tax calculator (it uses the standard deduction) and subtract your extra itemized amount from taxable income.