Itemized Deductions: How To Decide If They’re Right For You

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When you file your federal income tax return, you have a choice to make: Claim the standard deduction or itemize your deductions. The standard deduction is a dollar amount set by the IRS, while itemizing your deductions means you add up your total costs for a list of IRS-approved expenses, such as charitable contributions and property taxes.

Both types of deductions — standard and itemized — reduce how much of your income is subject to tax, so both reduce your tax liability.

For most taxpayers, it makes more sense to claim the standard deduction, because it’s usually a larger dollar amount than a taxpayer’s total expenses that qualify as itemized deductions. Currently, about 90 percent of taxpayers claim the standard deduction, according to IRS data. Still, for some taxpayers, itemizing deductions is a better choice. It all depends on your situation.

New rule for itemized deductions in 2026

Under the new tax law known as the One Big Beautiful Bill Act, starting in 2026 there’s a new rule for high-income taxpayers who itemize. If you’re in the top income tax bracket of 37 percent, next year itemized deductions will be limited to a value of 35 percent.

For example, in 2025 a $10,000 tax deduction is worth $3,700 for someone in the highest tax bracket; it will be worth only $3,500 starting in 2026. (For context, a single filer doesn’t enter the 37 percent tax bracket until income exceeds $626,350 in 2025; for married filing jointly filers, that threshold is $751,600.)

What are itemized deductions?

An itemized deduction is an expense you can claim on your tax return — for example, medical expenses, charitable contributions and property taxes — to reduce your adjusted gross income, or AGI. Reducing your AGI means that a smaller amount of your income is subject to tax.

To qualify as an itemized deduction, the expense has to be an IRS-approved expense. For many itemized expenses, the rules can be somewhat complex. You might need to meet specific thresholds before you can claim that expense, or there might be a cap on the dollar amount that you can claim.

Here are a couple of examples:

  • You can claim medical expenses, but only those that exceed 7.5 percent of your adjusted gross income.
  • There’s currently a $40,000 cap on claiming state and local taxes (that cap was $10,000, and will drop back to that amount in 2030).

New rules for charitable contributions coming in 2026

If you claim charitable contributions as an itemized deduction, a new rule starts in 2026: You’ll only be able to claim donations that exceed 0.5 percent of your adjusted gross income. For example, if your AGI is $150,000, you’ll have to subtract $750 from your total contributions, and then you can claim the remaining amount. (Here’s the math: 0.5 divided by 100, then multiplied by 150,000, equals 750.)

But if you don’t want to itemize, consider this: There’s also a new above-the-line deduction for cash contributions coming in 2026, worth up to $1,000 for single filers and  up to $2,000 for married filing jointly filers.

Standard deduction vs. itemized deductions

The standard deduction was almost doubled by the 2017 Tax Cuts and Jobs Act, and the tax law this year made those higher standard deduction amounts permanent. That’s why the vast majority of taxpayers now claim the standard deduction — because the smart tax move is to take the largest deduction available to you.

For example, if you’re a single filer, you’ll be able to claim a standard deduction of $15,750 on your 2025 tax return. For it to make sense to itemize, your qualified deductible expenses would have to add up to more than that amount.

But if the total of your itemized deductions exceeds the standard deduction, then it’s better to use itemized deductions to lower your taxable income. That could be the case if, for example, you had large medical expenses, suffered a loss of personal property due to a declared natural disaster, made substantial charitable contributions, and paid mortgage interest and property taxes.

Unless you paid large amounts out of pocket for qualified expenses, your itemized deductions might not reduce your taxable income as much as the standard deduction.

Standard deduction amounts for 2025 and 2024

Filing status Standard deduction for 2025 Standard deduction for 2024
Single or married filing separately $15,750 $14,600
Head of household $23,625 $21,900
Married filing jointly $31,500 $29,200

Examples of itemized deductions

Here are some of the most common expenses that qualify as itemized deductions:

  • Medical expenses above 7.5 percent of your AGI
  • State and local income or sales taxes and property taxes, limited to a total deduction of $40,000 (for tax years 2025 through 2029)
  • Mortgage interest
  • Charitable contributions
  • Disaster and theft losses

Itemized vs. above-the-line deductions

There are a handful of above-the-line deductions that taxpayers can claim whether they itemize or take the standard deduction. These deductions are called “above the line” because they are subtracted from your income on Form 1040 before adjusted gross income (AGI) is calculated. (Itemized deductions or the standard deduction are subtracted from AGI.)

This means you can claim these tax deductions (assuming you qualify for them) whether you itemize or claim the standard deduction:

How to claim itemized deductions

To claim itemized deductions, file Schedule A along with your Form 1040. You can use the IRS instructions for filling out Schedule A as a guide in helping you understand which expenses qualify. (Keep in mind that the IRS hasn’t yet released updated information for 2025 that reflects the changes made by the new tax law.)

For a list of above-the-line deductions, see Schedule 1’s “adjustments to income” section.

Be sure to keep documentation on hand to support your claims. For example, for charitable contributions over $250, be sure to ask the charitable organization for a written acknowledgment of your donation.

Pros and cons of itemized deductions

Pros

  • The major advantage of itemizing your deductions is that if the total dollar amount exceeds the amount of the standard deduction, then itemizing means you’ll pay a lower tax bill.
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Cons

  • Claiming itemized deductions can be a headache, because there are specific limits to many of the expenses that you’ll need to understand.
  • Tax preparers and tax software products often charge higher rates for taxpayers who itemize, compared with those who claim the simpler standard deduction.
  • You need to gather and hold onto proof that you paid the expenses you’re deducting. The standard deduction doesn’t require any additional paperwork.

Some taxpayers must itemize their deductions

In some situations people aren’t allowed to claim the standard deduction:

  • If a couple files as married filing separately and one spouse itemizes, then both spouses must itemize deductions.
  • You file your tax return for a period covering less than 12 months.
  • You were a nonresident alien or dual-status alien. (There are some exceptions to this rule.)
  • The return is filed for a trust, estate or partnership.
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