Yes, there is a limit on tax deductions, and in most cases there are several layered limits at once. For the 2026 tax year, nearly every federal deduction carries some combination of a fixed dollar cap, a percentage-of-income ceiling, an income-based phase-out, or a floor you have to clear before any deduction is allowed. The specific number depends on which deduction you’re claiming, your filing status, and often your income.
The limits below reflect the rules in effect for 2026, including changes made by the One Big Beautiful Bill Act signed in 2025.
The Standard Deduction Sets the Baseline
Before any itemized cap matters, you have to clear the standard deduction. For 2026:
- Single filers and married filing separately: $16,100
- Married couples filing jointly: $32,200
- Head of household: $24,150
These figures adjust with inflation each year.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments from the One, Big, Beautiful Bill If your total itemized deductions don’t exceed the standard amount for your filing status, you’ll take the standard deduction and the individual caps on mortgage interest, charitable gifts, and the rest never come into play.2Office of the Law Revision Counsel. 26 USC 63 – Taxable Income Defined
State and Local Tax (SALT) Cap
The SALT deduction lets you write off state and local income taxes, sales taxes, and property taxes combined. For 2026, the cap rose sharply. Most filers can now deduct up to roughly $40,400, up from the $10,000 limit that applied through 2025. Married couples filing separately get half that amount.3Office of the Law Revision Counsel. 26 USC 164 – Taxes
Higher earners lose the benefit gradually. Once your modified adjusted gross income exceeds $505,000 (roughly $252,500 for married filing separately), the $40,400 cap drops by 30 cents for every dollar of income above that threshold. It bottoms out at $10,000. A married couple filing jointly with MAGI above about $606,000 is back at the old $10,000 ceiling.
The larger cap is temporary. Starting in 2030, the deduction reverts to a flat $10,000 ($5,000 for married filing separately) regardless of income.
Mortgage Interest Limits
For mortgages taken out after December 15, 2017, you can deduct interest on the first $750,000 of loan principal. Married filing separately, the cap is $375,000. The One Big Beautiful Bill Act made this limit permanent.4Office of the Law Revision Counsel. 26 USC 163 – Interest
Older mortgages get better treatment. If your loan was originated on or before December 15, 2017, the grandfathered limit is $1 million ($500,000 for married filing separately). Refinancing generally preserves the grandfathered cap as long as the new loan doesn’t exceed the old balance.
Home equity debt is treated more strictly. Interest on a home equity loan or line of credit is only deductible if you used the money to buy, build, or substantially improve the home securing the loan. Using a HELOC to pay off credit cards or cover personal costs makes that interest nondeductible.5Internal Revenue Service. Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses) 2
Charitable Contribution Caps
Charitable deductions are capped as a percentage of your adjusted gross income, and the percentage varies by gift type and recipient:
- Cash to qualified public charities: 60% of AGI
- Appreciated property (stocks, real estate) to public charities: 30% of AGI
- Gifts to private foundations: 20% of AGI
- Qualified conservation easements: 50% of AGI, with a 15-year carryforward
Anything above the cap carries forward for up to five years (fifteen for conservation easements). If you earn $150,000 and donate $100,000 cash to a public charity, only $90,000 is deductible this year; the remaining $10,000 rolls forward.6Office of the Law Revision Counsel. 26 USC 170 – Charitable, Etc., Contributions and Gifts
The 60% cash ceiling had been scheduled to drop back to 50% after 2025. It was made permanent instead.
Medical Expenses: A Floor, Not a Ceiling
Medical expenses work in reverse. Instead of a maximum you can’t exceed, there’s a minimum you have to clear. Only the portion of unreimbursed medical and dental costs that exceeds 7.5% of your AGI is deductible.7Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses
With an AGI of $80,000, the floor is $6,000. Spend $9,000 on qualifying costs and you deduct $3,000. Spend $5,500 and you deduct nothing. Doctor visits, prescriptions, lab work, mental health care, mileage to appointments, and after-tax health insurance premiums all count. Anything reimbursed by insurance or paid through an HSA or FSA does not.
Capital Loss Deduction Limit
Capital losses first offset capital gains dollar for dollar. If losses exceed gains, you can deduct only $3,000 of the excess against ordinary income each year ($1,500 if married filing separately).8Office of the Law Revision Counsel. 26 USC 1211 – Limitation on Capital Losses
Unused losses carry forward indefinitely. A $30,000 net loss in 2026 would generate $3,000 in deductions each year for a decade, assuming no offsetting gains along the way. The carryforward never expires, but the annual $3,000 ceiling is a hard limit.
Qualified Business Income Deduction
Owners of sole proprietorships, partnerships, S corporations, and LLCs may deduct up to 20% of qualified business income. The One Big Beautiful Bill Act made this deduction permanent.
For 2026, the deduction begins to phase out at roughly $203,000 of taxable income for single filers and $406,000 for joint filers. Below those thresholds, most owners get the full 20% regardless of business type.
Above the thresholds, two extra limits apply. First, the deduction can’t exceed the greater of 50% of the wages the business pays or 25% of wages plus 2.5% of the cost of qualifying business property. Second, owners of “specified service” businesses (law, medicine, accounting, consulting, financial services, and similar fields) lose the deduction entirely over the next $75,000 of income for singles or $150,000 for joint filers. A single accountant with $278,000 in taxable income gets no QBI deduction.
Other Common Caps
- Student loan interest is capped at $2,500 per year, phases out at higher incomes, and isn’t available at all for married filing separately.9Internal Revenue Service. Topic No. 456, Student Loan Interest Deduction
- Section 179 lets business owners immediately deduct up to $2,560,000 of qualifying equipment and property in 2026, phasing out once total purchases exceed $4,090,000.
- Bonus depreciation on qualifying business assets falls to 20% for 2026 and reaches zero in 2027.
- The educator expense deduction for K-12 teachers loses its $300 dollar cap starting in 2026 but moves to Schedule A, so only teachers who itemize will benefit.
Overall Limit for Top-Bracket Filers
The old Pease limitation, which used to reduce total itemized deductions for high earners by 3% of the amount their AGI exceeded a threshold, was permanently repealed. In its place, starting in 2026, taxpayers in the top 37% bracket see each dollar of itemized deductions produce only 35 cents of tax savings rather than 37 cents. Filers below the top bracket are unaffected.
Deductions That No Longer Exist
Some limits are absolute: the deduction is gone. The miscellaneous itemized deductions that used to be allowed above a 2% of AGI floor (unreimbursed employee business expenses, investment advisory fees, tax preparation costs, and similar items) were suspended in 2018 and have now been permanently eliminated. They’re not coming back.
Foreign real property taxes on personal-use property also remain outside the SALT deduction. If you own foreign property through a trade, business, or investment activity, different rules may allow a deduction, but personal-use foreign property taxes are not deductible.