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    Standard vs Itemized Deductions in 2026

    TaxKiln Editorial · Last reviewed:

    For most filers the 2026 standard deduction — $16,250 single, $24,500 head of household, $32,500 MFJ — exceeds itemised deductions, so the choice is automatic. Itemising can win when SALT taxes (capped at $40,000 under OBBBA), mortgage interest, charitable contributions, and casualty losses combined exceed the standard deduction. Filers also itemise when their state requires it for state-tax purposes.

    The decision rule

    Sum the Schedule A categories: (1) medical above 7.5% of AGI, (2) SALT (income or sales + property, capped at $40,000 under OBBBA), (3) home mortgage and qualified residence interest, (4) charitable contributions (subject to AGI limits), (5) casualty and theft losses in a federally declared disaster. Compare the total to the standard deduction for your filing status. Take the higher figure.

    SALT cap mechanics (OBBBA)

    The TCJA imposed a $10,000 SALT cap. OBBBA raised the cap to $40,000 for 2025–2029, but the increase phases out for taxpayers above MAGI thresholds (approximately $500,000 MFJ), reverting toward $10,000. State pass-through entity tax (PTET) elections in 36+ states allow business owners to deduct state income tax at the entity level, bypassing the cap entirely for pass-through income.

    Mortgage and investment interest

    Acquisition-debt interest is deductible on up to $750,000 of mortgage principal (loans originated after Dec 15, 2017) or $1,000,000 of grandfathered debt. Home equity interest is deductible only if used to buy, build, or substantially improve the home securing the loan. Investment interest expense (Form 4952) is limited to net investment income.

    Charitable contributions

    Cash to public charities: up to 60% of AGI. Long-term appreciated property (stock, real estate): up to 30% of AGI at fair market value. Private foundations: 30% / 20% limits. Contributions above the limit carry forward five years. Donor-advised funds, qualified charitable distributions from IRAs after age 70½, and bunching strategies (concentrating multiple years of giving into a single tax year) are common itemising tactics.

    State interaction

    Several states (CA, NY, MN, others) require itemising for state purposes if you itemise federally — and a few allow itemising at the state level even when you take the federal standard deduction. The federal-vs-state interaction is the single most overlooked angle in the standard-vs-itemize decision.

    Worked example: Carlos and Ana Reyes (San Diego, CA — homeowners)

    MFJ. AGI $245,000. State income tax $14,200, property tax $11,800, mortgage interest $18,400 on a $620,000 loan, $7,500 charitable cash gifts. No medical or casualty.

    SALT: 14,200 + 11,800 = 26,000 → capped at $40,000 (no limitation; under OBBBA cap) Mortgage interest: 18,400 Charitable: 7,500 Itemised total: 26,000 + 18,400 + 7,500 = 51,900 Standard deduction (MFJ): 32,500 Itemise wins by 19,400 ≈ $4,656 federal tax saving at 24% marginal rate.

    Statute references

    • Itemised deductions — IRC §63 / §161–§224
    • SALT deduction and cap — IRC §164(b)(6)
    • Qualified residence interest — IRC §163(h)(3)
    • Charitable contribution limits — IRC §170(b)

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