After the Tax Cuts and Jobs Act of 2017, the standard deduction nearly doubled, and the percentage of filers who itemize dropped from about 30% to about 10%. For most W-2 employees, itemizing is no longer worth the time. But for homeowners, high earners in high-tax states, and people with large charitable contributions, itemizing can still save thousands.
Here’s how to decide for 2026.
The 2026 standard deduction
Per IRS Rev. Proc. 2025-32:
- Single / Married filing separately: $16,100
- Head of Household: $24,150
- Married Filing Jointly: $32,200
Additional standard-deduction amount for age 65+ or blind: $2,050 (unmarried) / $1,650 (married, per person). A separate temporary senior deduction of up to $6,000 per eligible person is available for 2025–2028 and phases out above $75,000 MAGI ($150,000 MFJ).
These are the inflation-adjusted figures for 2026, verify against the IRS notice.
When to itemize
You should itemize only if your itemized deductions exceed your standard deduction. Common itemized deduction sources:
1. State and Local Tax (SALT) deduction
The biggest itemized item for many filers combines state income tax (or sales tax) with eligible property tax. For 2026, the general cap is $40,400 per return ($20,200 MFS). It begins phasing down above $505,000 MAGI ($252,500 MFS), at 30 cents per dollar over the threshold, but cannot fall below $10,000 ($5,000 MFS).
If you’re in California with $15K state tax plus $8K property tax and your MAGI is below the phase-down threshold, the full $23K is inside the 2026 cap. High-income filers must calculate the phase-down before comparing itemized deductions with the standard deduction.
2. Mortgage interest deduction
Mortgage interest on the first $750,000 of acquisition debt (down from $1M pre-TCJA). Home equity debt only deductible if used for home improvement.
If you bought your home with a $400K mortgage at 6.5%, year-1 interest is roughly $25,500. Deductible in full.
3. Charitable contributions
Cash donations to qualified 501(c)(3) up to 60% of AGI. Property donations to 30%. Carryforward for 5 years if over the limit.
4. Medical expenses above 7.5% of AGI
Out-of-pocket medical expenses exceeding 7.5% of AGI are deductible. Most filers never use this, the threshold is high.
5. Disaster losses
Personal casualty losses are only deductible if attributable to a federally declared disaster (per TCJA).
The math: when does itemizing win?
Single filer in California with a $400K mortgage:
| Item | Amount |
|---|---|
| State income tax (CA, $100K AGI) | $6,500 |
| Property tax | $5,000 |
| Combined SALT | $11,500 |
| Mortgage interest | $25,500 |
| Charitable | $2,000 |
| Total itemized | $39,000 |
| Standard deduction | $16,100 |
Itemizing saves $22,900 of taxable income, about $5,038 in tax at the 22% marginal rate.
But change the scenario: $100K AGI, renting in a no-income-tax state, no mortgage interest, modest charitable giving:
| Item | Amount |
|---|---|
| SALT (state + property tax) | $1,500 |
| Mortgage interest | $0 |
| Charitable | $2,000 |
| Total itemized | $3,500 |
| Standard deduction | $16,100 |
Take the standard deduction; itemizing would cost $12,600 in lost deductions.
The “bunching” strategy
For taxpayers near the standard-itemized break-even, bunching is a powerful strategy: shift charitable contributions to alternate years to push above the threshold every other year, then take the standard in the off years.
Example: instead of $7,000/year charitable for 3 years (totaling $21,000), give $21,000 in year 1 and zero in years 2-3. Year 1 gets a huge itemized total above standard; years 2-3 take standard.
The cleanest way to bunch: a Donor-Advised Fund (DAF). Make a large lump-sum contribution to the DAF (which the IRS counts as fully deductible in that year), then disburse to charities over time at your own pace. See DAF Calculator.
What you can’t deduct anymore (post-TCJA)
- Unreimbursed employee expenses (home office, mileage, tools, for W-2 employees)
- Tax preparation fees
- Investment expenses (advisor fees, software, publications)
- Personal exemptions (replaced by the larger standard deduction)
- Moving expenses (except for active military)
Self-employed people may still deduct the ordinary and necessary business portion of expenses such as tax preparation, software, supplies, and a qualifying home office on Schedule C. Personal portions do not become deductible merely because someone is self-employed.
Special situations
MFS (married filing separately): Both spouses must take the same option. If one itemizes, the other CANNOT take the standard deduction (they automatically get $0 if the other itemizes).
State itemizing without federal itemizing: Many states require you to itemize federally to itemize at state. CA and NY allow you to take standard federally but itemize state. Worth a separate decision.
Pass-through QBI deduction: Not itemized, it’s a separate 20% deduction on qualified business income, available whether or not you itemize.
Common mistakes
Forgetting the 2026 SALT cap and phase-down. The general cap is $40,400, but it can shrink once MAGI exceeds $505,000; MFS amounts are half.
Charitable giving below the standard threshold. A $5K/year charitable habit alone doesn’t lift a single filer above the $16,100 standard. Bunching may help when total itemized deductions are near the threshold.
Missing prior-year carryforwards. Charitable contributions exceeding 60% AGI carry forward 5 years. Disaster losses, large investment property contributions, all carry. Track them.
Not pre-paying state tax in December. Up to the SALT cap, paying Q4 state estimated tax in December (instead of January) accelerates the deduction by a year, useful for itemizers near the cap.
Treating mortgage points as deductible interest. Points paid at origination are amortized over the loan life unless they meet specific requirements (purchase of primary residence, customary in area).
Worked example: deciding
Family of 4 in California:
- Combined AGI: $200K
- Mortgage interest: $20K
- State + property tax: $18K (below the general 2026 cap)
- Charitable: $3K
Itemized total: $41,000. Standard deduction (MFJ): $32,200.
Net benefit of itemizing: $8,800 → about $1,936 tax savings at a 22% marginal rate.
If charitable giving rises to $5K, itemized deductions become $43,000, a $10,800 advantage over the standard deduction and about $2,376 at a 22% marginal rate.
Other countries
The standard-vs-itemized choice is uniquely American. Other countries use targeted reliefs:
- United Kingdom, no general itemization. Specific reliefs (gift aid for charity, mortgage interest relief on let property only).
- Canada, most deductions are above-the-line. No standard-vs-itemized framework.
- Australia, work-related deductions are added directly to your tax return; no standard deduction concept.
- India, old regime allows specific deductions (80C/D/24); new regime gives a larger standard but no individual deductions.
Primary sources
- IRS Pub. 17, Your Federal Income Tax
- IRS Schedule A Instructions
- IRS Rev. Proc. 2025-32, 2026 inflation-adjusted figures
- IRS correction to the 2026 SALT deduction amount
- IRS Working Families Tax Cuts summary, including the temporary senior deduction