The Basics: Standard Deduction vs. Itemized Deductions

• Standard deduction: A fixed amount that reduces your taxable income. Most taxpayers claim this instead of itemizing; amounts are indexed annually and vary by filing status, with additional amounts for age (65+) and/or blindness. Certain taxpayers are not eligible for the standard deduction (e.g., married filing separately if the spouse itemizes; nonresident or dual-status aliens, with limited exceptions). You generally pick the method (standard or itemized) that produces the lower tax. Topic No. 551

• Itemized deductions: Specific deductible expenses you add up on Schedule A. You itemize when your allowable itemized deductions exceed your standard deduction; common categories include medical and dental expenses, certain state and local taxes (SALT), mortgage interest and points, charitable contributions, and disaster-related casualty/theft losses. 2024 Schedule A Instructions

Standard Deduction: How Much and Who Gets It

For tax year 2024, the basic standard deduction amounts are:

• $14,600 for Single or Married Filing Separately

• $21,900 for Head of Household

• $29,200 for Married Filing Jointly or Qualifying Surviving Spouse 2024 Form 1040 Instructions

Additional standard deduction amounts apply if you are age 65 or older and/or blind:

• $1,950 if Single or Head of Household; $1,550 if Married Filing Jointly/Separately or Qualifying Surviving Spouse (per eligible person) Topic No. 551

Dependents have a special rule: a dependent’s standard deduction is the greater of $1,300 or the dependent’s earned income plus $450, up to the basic standard deduction for their filing status. Topic No. 551

Who Cannot Take the Standard Deduction

You cannot take the standard deduction if:

• You are married filing separately and your spouse itemizes.

• You file a return for a period of less than 12 months due to a change in your annual accounting period.

• You are a nonresident alien or dual‑status alien (subject to certain exceptions involving an election to be treated as a U.S. resident when married to a U.S. citizen/resident). Topic No. 551

Itemized Deductions: What Qualifies (Schedule A)

You claim itemized deductions on Schedule A. Below are the major categories and key limitations.

1. Medical and dental expenses

• Deduct unreimbursed out-of-pocket medical and dental expenses only to the extent they exceed 7.5% of your adjusted gross income (AGI). For example, with $100,000 AGI and $12,000 of qualifying expenses, the first $7,500 is nondeductible and $4,500 is deductible. Qualifying expenses include insurance premiums you paid (subject to specific rules), medical services, prescription drugs, certain travel/lodging, and eligible equipment/supplies. 2024 Schedule A Instructions

1. State and local taxes (SALT)

• You can deduct state and local income taxes or general sales taxes (but not both) plus state and local real property taxes and personal property taxes. The total deduction for the SALT items is generally capped at $10,000 ($5,000 if married filing separately). 2024 Schedule A Instructions

1. Home mortgage interest and points

• Mortgage interest on acquisition indebtedness used to buy, build, or substantially improve your qualified home is generally deductible (subject to debt limits under current law), and points may be deductible under special rules. Interest on home equity loans is deductible only if the funds are used to buy, build, or substantially improve the residence securing the loan. See the IRS itemized deductions FAQ for mortgage-related guidance and confirm current-year limits. Itemized Deductions FAQ

1. Charitable contributions

• Gifts to qualified charities are deductible if you itemize, subject to AGI limits and substantiation rules. You must have proper receipts and acknowledgments; larger noncash gifts require additional reporting. Charitable Contribution Deductions Overview

1. Casualty and theft losses

• For personal-use property, only losses from federally declared disasters are deductible, and you must meet per-event and AGI thresholds as described in the Schedule A instructions and Publication 547. 2024 Schedule A Instructions

1. Miscellaneous itemized deductions

• Many miscellaneous itemized deductions subject to the 2% AGI floor (such as unreimbursed employee expenses and certain investment fees) are suspended for tax years after 2017 and before 2026, with limited exceptions. Always verify current-year rules. Publication 529

Note: Some deductions reduce your income “above-the-line” (e.g., student loan interest, HSA contributions) and don’t depend on itemizing. Don’t confuse these with Schedule A deductions. Credits and Deductions Overview

The Decision Framework: When to Itemize vs. Take the Standard Deduction

A. Start with your standard deduction

• Identify your filing status and applicable basic amount, then add any additional amount for age/blindness. This provides your benchmark. Topic No. 551

B. Tally potential itemized deductions

• Estimate Schedule A categories using thresholds and caps:

  • Medical: Deductible portion above 7.5% of AGI. 2024 Schedule A Instructions

  • SALT: State/local income or sales tax (not both), plus property/personal property taxes, up to the cap. 2024 Schedule A Instructions

  • Mortgage interest/points: Deductible portions based on current rules; interest on home equity generally requires “buy, build, substantially improve” use. Itemized Deductions FAQ

  • Charitable gifts: Cash and noncash gifts within AGI limits; meet substantiation requirements. Charitable Contribution Deductions Overview

  • Casualty/theft (disaster-related only): Apply thresholds and filing requirements. 2024 Schedule A Instructions

C. Compare totals

• If your itemized total is greater than your standard deduction, itemizing generally lowers your tax; if not, take the standard deduction. Credits and Deductions Overview

D. Special cases to consider

• Married filing separately: If one spouse itemizes, the other cannot claim the standard deduction. Topic No. 551

• Homeowners with significant mortgage interest and property taxes often itemize—but SALT caps and mortgage rules can change that calculus. 2024 Schedule A Instructions

• Substantial charitable giving may tip the scale toward itemizing (ensure proper records). Charitable Contribution Deductions Overview

• Large medical expenses: In years with unusually high out-of-pocket medical costs, itemizing can be beneficial if the deductible portion plus other itemized categories exceed your standard deduction. 2024 Schedule A Instructions

Illustrative Examples

Example 1: Standard deduction wins

• Filing status: Single

• AGI: $70,000

• Itemized estimate: Medical expenses $3,000 (7.5% of AGI is $5,250 → $0 deductible), SALT $5,000, Mortgage interest $0 (renter), Charity $800 → total ≈ $5,800

• With a 2024 standard deduction of $14,600 for Single, the standard deduction is clearly better. 2024 Form 1040 Instructions

Example 2: Itemizing wins for a homeowner

• Filing status: Married Filing Jointly

• AGI: $180,000

• Itemized estimate: Medical $10,000 (7.5% of AGI is $13,500 → $0 deductible), SALT $10,000 (at cap), Mortgage interest $12,000, Charity $5,000 → total ≈ $27,000

• With a 2024 standard deduction of $29,200 for MFJ, the standard deduction still exceeds the itemized estimate; unless other itemized categories push the total beyond $29,200, the standard deduction likely wins in this scenario. 2024 Form 1040 Instructions; 2024 Schedule A Instructions

Example 3: High medical expenses tip the scale

• Filing status: Head of Household

• AGI: $90,000

• Medical: $12,000 unreimbursed → deductible portion = $12,000 − $6,750 (7.5% of AGI) = $5,250

• SALT: $8,000

• Mortgage interest: $4,500

• Charity: $1,000 → total ≈ $18,750

• With a 2024 standard deduction of $21,900 for Head of Household, the standard deduction may still be larger unless other itemized items increase the total beyond $21,900. Always run the numbers for your actual year and facts. 2024 Form 1040 Instructions; 2024 Schedule A Instructions

Common Pitfalls and Planning Tips

• Don’t double count: Some items reduce AGI “above the line” (e.g., student loan interest, HSA contributions) and aren’t Schedule A itemized deductions. Credits and Deductions Overview

• SALT cap awareness: The $10,000 SALT cap is a combined limit for state/local income or sales taxes plus real and personal property taxes. Don’t exceed the cap in your Schedule A total. 2024 Schedule A Instructions

• Mortgage interest and points: Deductibility depends on use of proceeds and current law debt limits. Confirm your facts and the latest guidance before itemizing interest/points. Itemized Deductions FAQ

• Substantiation is critical:

  • Medical: Keep receipts and proof of payment, and apply the 7.5% AGI threshold. 2024 Schedule A Instructions

  • Charity: Obtain contemporaneous written acknowledgments for gifts of $250+; follow rules for noncash contributions. Charitable Contribution Deductions Overview

  • Taxes: Retain property tax bills, proof of payment, and records of state income/sales taxes. 2024 Schedule A Instructions

  • Mortgage: Retain Form 1098 and documentation of loan use for home equity debt. Itemized Deductions FAQ

• Married filing separately: Coordinate with your spouse; if one itemizes, the other cannot take the standard deduction. Topic No. 551

• Disaster losses: Personal casualty losses are generally deductible only for federally declared disasters and must meet thresholds. 2024 Schedule A Instructions

A Quick Decision Checklist

1. Identify your filing status and check the current standard deduction (including any additional amount for age/blindness). Topic No. 551

2. Estimate each Schedule A category carefully, applying thresholds and caps:

   • Medical (over 7.5% of AGI) 2024 Schedule A Instructions

   • SALT (subject to the $10,000/$5,000 cap) 2024 Schedule A Instructions

   • Mortgage interest/points (per current rules) Itemized Deductions FAQ

   • Charitable gifts (AGI limits and substantiation) Charitable Contribution Deductions Overview

   • Casualty/theft (federally declared disasters only) 2024 Schedule A Instructions

3. Total your itemized deductions and compare to your standard deduction. Credits and Deductions Overview

4. Choose the larger amount to reduce your tax. Topic No. 551

5. Keep thorough records and follow IRS documentation requirements. 2024 Schedule A Instructions

Bottom Line

Itemize when your allowable Schedule A deductions exceed your standard deduction, or when you’re required to itemize (for example, because your spouse itemizes on a separate return). For many taxpayers—especially renters with modest deductible expenses—the standard deduction is simpler and results in a lower tax. Homeowners with significant mortgage interest and property taxes, high charitable giving, or large medical expenses in a given year may benefit from itemizing. Revisit the choice every year, keep meticulous records, and consult the latest IRS instructions to ensure you’re maximizing your tax savings. All amounts and thresholds are year‑specific—always confirm current-year figures in IRS guidance. 2024 Form 1040 Instructions