Should I itemize my taxes?

A tax deduction decreases your taxable income, which in turn can lower your tax bill. There are generally two ways you can claim deductions on your federal income tax return: You can itemize deductions, or you can take the standard deduction.

A review of the standard deduction amount and what qualifies for itemizing can help you figure out which is right for you.

What is the standard deduction?

The standard deduction is a specific amount provided by the IRS. It varies based on your income, age, filing status and whether you’re blind, and it changes each year.

For the 2025 tax year:

• If you’re single or filing as an individual, your standard deduction is $15,750 (plus $2,000 if age 65 and older).
• If you’re married and filing jointly, your standard deduction is $31,500 (plus $1,600 per person age 65 or older).
• If you’re filing as head of household, your standard deduction is $23,625 (plus $2,000 if you’re age 65 and older).

In addition, the One Big Beautiful Bill Act (OBBBA) added a temporary “bonus” deduction of $6,000 for taxpayers age 65 and over. This deduction begins to phase out once your modified adjusted gross income (MAGI) exceeds $75,000 for single filers and $150,000 for married couples filing jointly. The bonus deduction is effective for the 2025 tax year and expires in 2029.

Why should you itemize your deductions?

When it comes to deductions, you generally want to choose the option that lowers your taxable income the most.

The standard deduction is a fixed amount, while itemized deductions are made up of a list of eligible expenses and require tracking and documentation. You can use IRS Schedule A (Form 1040) to itemize your mortgage interest expense, charitable donations, medical and dental expenses, state taxes and other itemizable expenses to see whether your itemized deductions will exceed your standard deduction.

What expenses qualify for itemized deductions?

Common expenses that qualify for itemized deduction include qualified mortgage interest, state and local income taxes, medical and dental expenses, and charitable contributions.

Itemize mortgage interest.

For married couples filing jointly, you can deduct home mortgage interest on the first $750,000 of debt ($375,000 for married couples filing separately). For mortgages incurred before December 16, 2017, married couples filing jointly can deduct home mortgage interest on the first $1 million of debt.

Note that mortgage insurance premiums can once again be included as part of deductible mortgage interest.

Itemize state and local taxes.

Under OBBBA, the itemized deduction for state and local taxes (known as the SALT deduction) increases to $40,000 for married couples filing jointly with MAGI under $500,000 and $20,000 for married couples filing separately with MAGI under $250,000.

Itemize medical and dental expenses.

You’re allowed to deduct qualified, unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI). Qualified expenses include surgeries, preventive care, treatment, dental and vision care, and prescription medications.

Medical expenses for which you’ve been reimbursed by your insurance or employer cannot be deducted.

Itemize charitable deductions.

Contributions to qualified charities are still fully deductible. If you itemize deductions, gifts of cash to qualified public charities can be deducted in an amount up to 60% of your adjusted gross income (AGI). If donations are made to private foundations (such as a family foundation), the annual limit is 30% of your AGI.

Note that the OBBBA reduces total itemized charitable donation deductions by 0.5% of AGI, beginning in 2026. So, a taxpayer with $200,000 in AGI would receive no deduction for the first $1,000 in charitable donations.

Small donation amounts may not be enough of a deduction to take advantage of itemizing. If the tax benefits are an important consideration, you may want to approach your giving strategy differently. For example, if you bunch your donations into one year instead of multiple, you’re more likely to exceed the standard deduction.

New tax deductions for 2025 and beyond

The OBBBA added several new “above the line” deductions that are available whether you itemize or not:

• The $6,000 deduction for seniors age 65 and over (as noted above).
• Effective 2025-2028, individuals can deduct up to $25,000 in qualified tip income (occupation limits apply) and up to $12,500 in qualified overtime pay.
• Effective 2025-2028, eligible taxpayers can deduct up to $10,000 of interest paid on loans for a new vehicle with final assembly in the U.S and purchased after Dec. 31, 2024.
• A charitable donation deduction of up to $1,000 for single taxpayers ($2,000 for married couples filing jointly).

MAGI thresholds and phaseouts may apply. Download the OBBBA quick reference guide for more details.

Should I itemize my deductions?

Deciding if you should itemize deductions depends on your situation. If your total deductions exceed the standard deduction, then itemizing will work for you. However, if your itemized deductions total less than the standard deduction, taking the standard deduction will make more sense.

To ensure you’re making the most informed choice, consider meeting with your tax and financial professionals. They can provide guidance tailored to your unique circumstances and goals.

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