Standard Deduction vs Itemized Deductions: Which Should You Take?
For 2026 the standard deduction is about $15,000 single, $30,000 married filing jointly, and $22,500 head of household — taken by roughly 87% of taxpayers. Itemizing only pays when deductions like mortgage interest and state/local taxes (capped at $10,000) exceed it.
Standard Deduction Overview
The standard deduction is a flat dollar amount that reduces your taxable income — no receipts or documentation required. For 2026, the standard deduction is approximately $15,000 for single filers, $30,000 for married filing jointly, and $22,500 for head of household. Additional amounts are available for taxpayers age 65+ or blind. About 87% of taxpayers now take the standard deduction, up from about 70% before the Tax Cuts and Jobs Act nearly doubled it in 2018.
Common Itemized Deductions
Itemized deductions include: 1) State and local taxes (SALT) — income, property, and sales taxes, capped at $10,000 per return. 2) Mortgage interest — on up to $750,000 of acquisition debt for homes purchased after 2017. 3) Charitable contributions — generally up to 60% of AGI for cash donations to qualified organizations. 4) Medical and dental expenses — the portion exceeding 7.5% of AGI. 5) Casualty and theft losses — limited to federally declared disasters.
How to Decide Which to Take
Compare your total itemized deductions to the standard deduction for your filing status. If itemized deductions exceed the standard deduction, itemizing lowers your tax bill more. Key scenarios where itemizing makes sense: you have a large mortgage with significant interest, you make substantial charitable contributions, you have high medical expenses relative to income, or you live in a high-tax state and pay significant state income and property taxes (subject to the SALT cap).
The SALT Deduction Cap and Workarounds
The $10,000 cap on state and local tax deductions ($5,000 for married filing separately) is one of the most impactful limits in the tax code. High-income taxpayers in high-tax states are most affected. Some states have enacted pass-through entity (PTE) tax election workarounds that allow business owners to pay state taxes at the entity level and deduct them federally. The SALT cap is scheduled to expire after 2025 unless Congress extends it — which could significantly change the standard-vs-itemized calculation.
Bunching Strategy for Deductions
If your itemized deductions are just below the standard deduction threshold, consider 'bunching' — concentrating deductible expenses into a single year to exceed the threshold, then taking the standard deduction in alternating years. This works well with charitable contributions (using a donor-advised fund to front-load giving) and medical expenses (scheduling elective procedures in a single year). Timing mortgage payments and property taxes can also help bunch deductions strategically.
Frequently Asked Questions
When does it make sense to itemize deductions?
Itemizing makes sense when your total itemized deductions — mortgage interest, state and local taxes (capped at $10,000), charitable contributions, medical expenses over 7.5% of AGI, and others — exceed the standard deduction for your filing status. Roughly 87% of taxpayers take the standard deduction because it is larger.
Can I take the standard deduction one year and itemize the next?
Yes. You can choose the better option each year. This flexibility enables 'bunching' — concentrating deductible expenses like charitable gifts into a single year to exceed the standard deduction threshold, then taking the standard deduction in alternating years.
Is mortgage interest still deductible if I itemize?
Yes, mortgage interest is deductible on up to $750,000 of acquisition debt for homes purchased after 2017 ($1 million for older mortgages). The deduction is part of your itemized total and is lost if you take the standard deduction instead.
What is the SALT deduction cap?
The state and local tax (SALT) deduction — covering state income, sales, and property taxes — is capped at $10,000 per return ($5,000 if married filing separately). Because the cap is well below what many high-tax-state residents pay, it significantly affects the standard-vs-itemized decision.