The 2026 Standard Deduction
Standard deductions for 2026: $16,100 single, $32,200 married filing jointly, $24,150 head of household. These are the baseline subtractions from your income before applying tax brackets — automatic, no documentation required.
Additional standard deduction for age 65+ or blind: $1,650 single / $1,300 each spouse MFJ. So a 67-year-old single filer gets $16,100 + $1,650 = $17,750 standard deduction.
Standard deduction increases annually for inflation. The 2017 TCJA roughly doubled the standard deduction (single went from $6,500 in 2017 to $12,000 in 2018). This is the single largest reason itemizing has become rare.
Taking the standard deduction is automatic if you don't itemize. No documentation needed, no Schedule A. This simplicity has real value — both for tax preparation and for IRS audit risk (standard deduction takers are essentially never audited on deductions).
Itemized Deductions Available
State and local taxes (SALT): state income tax, property tax, and local tax — capped at $10,000 total. The cap is the same for single filers and married filing jointly. Most high-earners in any state hit this cap immediately on state income tax alone.
Mortgage interest: deductible on up to $750,000 of mortgage debt for primary residence and one second home (combined). For mortgages originated before December 15, 2017, the limit is $1 million. Home equity loan interest is only deductible if the loan is used for home improvement (not other personal expenses).
Charitable contributions: cash gifts to qualified charities up to 60% of AGI (some categories at 50%, 30%, or 20%). Non-cash gifts (appreciated stock, household goods) at fair market value, with various AGI limits depending on the type and recipient.
Medical expenses: above 7.5% of AGI. So if your AGI is $200K, only medical expenses above $15,000 are deductible. Most taxpayers don't have enough out-of-pocket medical expense to clear the floor.
Casualty losses: only deductible in federally declared disaster areas. The 2017 TCJA eliminated personal casualty losses for non-disaster events.
Other less common items: investment interest, gambling losses (only up to gambling winnings), tax preparation fees (limited).
When Itemizing Wins
The basic math: if your itemized deductions exceed the standard deduction, itemize. If they're below, take the standard. For most middle-class taxpayers without mortgages or significant charitable giving, the standard wins.
Common scenarios where itemizing wins: homeowners in expensive markets (high mortgage interest + property tax), households with significant charitable giving (10%+ of income to charity), seniors with major medical expenses, high earners in high-tax states (max state income tax + max SALT + mortgage = often above standard).
Concrete example: married couple with $250K income, $5,000/month mortgage payment ($30,000/year of which is interest), $8,000 property tax (capped at $10K SALT counting state income tax), $15,000 in charitable giving. Itemized: $30K mortgage interest + $10K SALT + $15K charity = $55,000. Standard: $32,200. Itemize — saving $22,800 of additional deduction = $5,500-$8,000 of additional tax savings.
Borderline cases: couples with smaller mortgages or modest charitable giving might be near the standard deduction threshold. Run the math both ways. Sometimes the standard deduction wins by a few hundred dollars and you're $200 better off taking it.
The Bunching Strategy
Bunching is the technique of timing deductible expenses to fall in alternating years — itemizing in 'bunched' years and taking the standard deduction in 'lean' years. This captures more total deduction over a multi-year period than spreading expenses evenly.
Concrete example: a couple with $30,000/year of typical itemizable deductions (just at the standard deduction threshold). If they itemize each year, they'd get $30,000 deduction — but the standard would have given them $32,200, so itemizing actually loses by $2,200/year.
Bunching approach: in year 1, prepay 2 years of charitable giving (say $20K instead of $10K), prepay state taxes if possible, and front-load other deductible expenses. Year 1 itemized: $40,000+. Year 2: minimal deductible expenses, take standard $32,200. Total over 2 years: $72,200, vs. $64,400 if taking standard both years. Captured $7,800 of additional deduction.
Donor-Advised Funds (DAFs) make charitable bunching frictionless. Contribute a large lump sum to a DAF in the bunching year (immediate tax deduction at the contribution year's rates), then distribute to actual charities over the following years. The DAF takes the deduction; the charities receive ongoing support. Most charities have no preference for lump sum vs. recurring, so the DAF approach is win-win.
Charitable Giving Strategies
Direct cash gifts: deductible up to 60% of AGI for qualified charities. Easy to track, easy to deduct. The standard approach for routine charitable giving.
Appreciated stock donation: dramatically more efficient than selling and donating cash. Donate appreciated stock directly to charity. You avoid the capital gains tax on appreciation; the charity sells with no tax (they're tax-exempt); you deduct the full fair market value. On $50,000 of appreciated stock with $20,000 basis: you avoid $4,500 of capital gains tax (15% LTCG + 3.8% NIIT) AND get a $50,000 deduction. Net benefit: 35-50% more efficient than donating cash.
Donor-Advised Fund (DAF): like a private charitable foundation but simpler and more accessible. Contribute (deductible immediately), invest within the DAF, then distribute to charities over time at your own pace. Fidelity Charitable, Schwab Charitable, and Vanguard Charitable are the major sponsors. DAF is the easiest way to bunch charitable contributions or donate appreciated stock.
Qualified Charitable Distributions (QCDs): for taxpayers 70½+ with traditional IRAs. Up to $108,000/year in 2026 (indexed) can be sent directly from IRA to qualified charity. The QCD counts toward your RMD but is excluded from AGI — bypassing both the SALT cap and the standard deduction issue entirely. Critical for charitable retirees who'd otherwise see no benefit from giving.
Charitable Remainder Trusts: for very high-net-worth individuals with appreciated assets and charitable intent. Fund a CRT with appreciated assets, receive income for a term (or life), with the remainder going to charity. Immediate charitable deduction, no capital gains on the donated assets, ongoing income stream. Complex but powerful for the right situation.
Common Mistakes
Not running the numbers. Many people just take the standard deduction reflexively without checking whether itemizing would beat it. Tax software does this automatically — but if you do your own taxes, run both calculations.
Forgetting state itemizing rules. Some states require you to itemize on the state return if you itemize federally (or vice versa). Some states allow itemizing on the state return even if you take the federal standard. Check your state's rules to ensure you're optimizing both returns.
Missing carryover charitable deductions. If your charitable contributions in one year exceed the AGI percentage limit, the excess carries forward 5 years. Track these carefully — they're easy to forget and can be valuable in future years.
Donating non-cash items at wrong values. Goodwill donations of household items must be valued at fair market value (not original purchase price). Use guides like 'Goodwill Donation Value Guide' or apps like ItsDeductible to value donated items properly. The IRS audits inflated non-cash deductions aggressively.
Forgetting documentation. Charitable contributions over $250 require a written acknowledgment from the charity. Donations over $5,000 (non-cash) require a qualified appraisal. Keep records — the IRS disallows deductions without proper documentation.
Letting the standard deduction discourage giving. Some taxpayers reduce charitable giving because 'I don't itemize anyway.' Don't let tax efficiency override your values. But do consider bunching, DAF, or QCDs to capture tax benefit on the giving you'd do anyway.