How the choice works
On your tax return you reduce your taxable income by either the standard deduction (a flat amount Congress sets each year) or by itemizing your deductible expenses (mortgage interest, state and local taxes, charity, medical above 7.5% AGI). You pick whichever is larger.
The 2017 Tax Cuts and Jobs Act roughly doubled the standard deduction and capped state-and-local-tax (SALT) deductions at $10,000. The result: itemizing went from ~30% of returns down to under 10%.
2026 standard deduction amounts
- Single or married filing separately: $14,600 (verify with IRS for current year).
- Married filing jointly or qualifying surviving spouse: $29,200.
- Head of household: $21,900.
- Add ~$1,550 if you're 65+ or blind (married); ~$1,950 if single.
What you can itemize
- Mortgage interest on up to $750,000 of home-acquisition debt ($1M for pre-2018 mortgages).
- State and local taxes (SALT), capped at $10,000 total, income or sales tax, plus property tax.
- Charitable contributions to qualified 501(c)(3) organizations.
- Medical and dental expenses above 7.5% of AGI.
- Casualty losses in federally declared disaster areas.
When itemizing wins
Mortgage interest alone above $20,000/year (typically a $400k+ mortgage in early years) plus $10,000 SALT plus moderate charity puts a married couple over $29,200 quickly.
Major medical year: a serious illness or surgery year can push deductible medical above $20,000 alone. Combined with SALT and charity, itemizing dominates.
Large charitable year: a stock donation or planned giving event can push itemized over the standard threshold.
Bunching: the strategy that revives itemizing
If your itemized total each year hovers just below the standard deduction, you're permanently leaving the deduction value on the table. Bunching combines two years of charitable giving into one year so you itemize every other year and take the standard deduction in the off years.
Combined with a Donor-Advised Fund (Fidelity Charitable, Schwab Charitable, Vanguard Charitable), bunching lets you front-load multiple years of giving while still distributing to charities on your normal schedule.
Four deductions most filers miss when itemizing
- Sales tax in no-income-tax states (use the IRS sales-tax calculator).
- Property tax paid at closing on a home purchase or sale.
- Mileage to medical appointments and charitable activities.
- Mortgage points paid at closing on a refinance (deducted over the life of the loan).
Filing software handles the choice
TurboTax, H&R Block, FreeTaxUSA, and TaxAct all calculate both methods automatically and pick the larger deduction. Don't agonize over the choice, enter the data and let the software run both.
If you're using a CPA, ask them to show you both calculations explicitly so you understand which one you're taking and why.
