One of the most important tax decisions you'll make each year is whether to take the standard deduction or itemize. The right choice can save you hundreds or even thousands of dollars.
Since the Tax Cuts and Jobs Act nearly doubled the standard deduction in 2018, roughly 90% of taxpayers now take the standard deduction. But that doesn't mean it's automatically the best choice for you.
2025 Standard Deduction Amounts
| Filing Status | 2025 Standard Deduction |
|---|---|
| Single | $14,600 |
| Married Filing Jointly | $29,200 |
| Married Filing Separately | $14,600 |
| Head of Household | $21,900 |
If you're 65 or older, or legally blind, you get an additional deduction of $1,950 (single/HOH) or $1,550 (married).
What Can You Itemize?
Itemized deductions include:
- State and local taxes (SALT): Income tax, property tax, and sales tax - capped at $10,000 total
- Mortgage interest: Interest on up to $750,000 of mortgage debt
- Charitable donations: Cash and non-cash donations to qualified organizations
- Medical expenses: Amounts exceeding 7.5% of your adjusted gross income
- Casualty and theft losses: From federally declared disasters only
Standard Deduction: Pros and Cons
✅ Pros
- Simple - no receipts or records needed
- Fast - less time preparing taxes
- Guaranteed - everyone qualifies
- Higher than ever in 2025
❌ Cons
- May leave money on the table
- No benefit from large deductions
- Same amount regardless of spending
Itemized Deductions: Pros and Cons
✅ Pros
- Potentially larger deduction
- Rewards homeownership and giving
- Can reduce tax bill significantly
❌ Cons
- Requires detailed record-keeping
- More complex tax return
- May trigger closer IRS scrutiny
- SALT cap limits benefits
When Should You Itemize?
📊 The Simple Rule
Itemize if your total itemized deductions exceed your standard deduction.
For a single filer, that means itemizing if deductions exceed $14,600. For married filing jointly: $29,200.
You're more likely to benefit from itemizing if you:
- Own a home with a mortgage (and pay significant interest)
- Live in a high-tax state (NY, CA, NJ)
- Made large charitable donations
- Had major unreimbursed medical expenses
- Experienced a casualty loss from a federal disaster
Example Comparison
Let's say Sarah is single and has the following potential itemized deductions:
| Deduction | Amount |
|---|---|
| State income tax | $6,000 |
| Property tax | $5,000 |
| Mortgage interest | $8,000 |
| Charitable donations | $2,000 |
| Total Itemized | $21,000* |
*Note: SALT (state + property tax) is capped at $10,000, so her actual SALT deduction is $10,000, not $11,000.
Adjusted total: $20,000
Since $20,000 > $14,600 (standard deduction), Sarah should itemize and save an extra $5,400 in deductions!
Not Sure Which to Choose?
Our AI calculator compares both options and shows you which saves more.
Calculate Now →Key Takeaways
- Most taxpayers benefit from the standard deduction
- Homeowners with mortgages should always calculate both options
- The $10,000 SALT cap limits itemizing for high-tax state residents
- Keep receipts and records even if you take the standard deduction - circumstances change
- Consider "bunching" charitable donations in alternating years to exceed the threshold
Disclaimer: This is for informational purposes only. Please consult a tax professional for advice specific to your situation.