Tax deductions reduce the income the IRS can tax, which lowers your bill at your marginal rate. For 2026, a single filer’s standard deduction is $16,100, a head of household gets $24,150, and a married couple filing jointly can claim $32,200.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Itemizing on Schedule A only pays off when your qualifying expenses beat those amounts. Some deductions, like contributions to a health savings account or interest on student loans, come off your income no matter which route you pick.
Standard Deduction or Itemize
Each year you choose one path. Take the flat standard deduction for your filing status, or list actual expenses on Schedule A of Form 1040.2Office of the Law Revision Counsel. 26 USC 63 – Taxable Income Defined If your qualifying expenses add up to more than the standard amount, itemize. If they don’t, take the standard deduction and skip the paperwork.
Taxpayers who are 65 or older or legally blind get an additional standard deduction on top of the base: $2,050 for single filers and $1,650 per qualifying spouse on a joint return.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 A married couple where both spouses are 65 or older would get a combined standard deduction of $35,500.
Most people who beat the standard deduction do so with some combination of mortgage interest, state and local taxes, and charitable giving. If you’re within a few hundred dollars of breakeven, the extra recordkeeping is rarely worth it.
What You Can Itemize
Schedule A groups deductions into a handful of categories, each with its own rules.
State and Local Taxes
The state and local tax deduction, known as SALT, covers state and local income taxes (or general sales taxes, if you prefer) plus property taxes. Under changes enacted by the One, Big, Beautiful Bill, the SALT cap for 2026 is $40,000 for most filers and $20,000 for those married filing separately.3Internal Revenue Service. Topic No. 503, Deductible Taxes That is a sharp increase from the $10,000 cap that applied in recent years.
The new cap phases down for higher earners. Once your modified adjusted gross income passes roughly $505,000 ($252,500 married filing separately), the cap shrinks by 30 cents for each dollar over the threshold, but it cannot drop below $10,000. You choose between deducting state income taxes or state sales taxes, not both. In states with no income tax, the sales tax deduction is the obvious pick, and the IRS provides optional tables if you didn’t track actual sales tax paid.
Mortgage Interest
Interest paid on a mortgage used to buy, build, or substantially improve your primary home or a second home is deductible on debt up to $750,000 ($375,000 if married filing separately).4Internal Revenue Service. Publication 936, Home Mortgage Interest Deduction Mortgages taken out on or before December 15, 2017, are grandfathered at the older $1 million limit. Your lender sends Form 1098 in January with the exact interest figure.
Home equity loan interest is deductible only if the borrowed funds were used to buy, build, or improve the home securing the loan. Using a home equity loan to pay off credit cards or fund a vacation does not qualify.
Charitable Contributions
Cash donations to qualifying nonprofits are deductible up to 60% of your AGI. Donations of appreciated property like stock are capped at 30% of AGI.5Office of the Law Revision Counsel. 26 USC 170 – Charitable, Etc., Contributions and Gifts Amounts above those limits carry forward for up to five years.
Substantiation rules are strict. For any single donation of $250 or more, you need a written acknowledgment from the organization that states the amount and whether you received anything in return, and you must have it in hand before you file.5Office of the Law Revision Counsel. 26 USC 170 – Charitable, Etc., Contributions and Gifts For smaller cash gifts, a bank record or receipt showing the organization’s name, date, and amount is enough. Donated property worth more than $5,000 generally requires a qualified appraisal.
Medical and Dental Expenses
You can deduct medical and dental costs, but only the portion above 7.5% of your AGI. If your AGI is $80,000 and you spent $9,000 on medical care, only $3,000 clears the $6,000 floor.6Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses Costs reimbursed by insurance don’t count. Qualifying expenses include doctor visits, prescriptions, dental work, vision care, and medical equipment. The 7.5% floor means this deduction rarely helps unless you had a major medical event or relatively low income.
Deductions You Can Take Without Itemizing
Some deductions come off your income before the standard-versus-itemize choice matters at all. They reduce gross income to reach your adjusted gross income, and you can claim them whether you itemize or not.7Office of the Law Revision Counsel. 26 USC 62 – Adjusted Gross Income Defined Lowering AGI also expands eligibility for credits and other tax breaks that phase out at higher income.
Health Savings Account Contributions
If you’re enrolled in a high-deductible health plan, contributions to an HSA are deductible. For 2026, the contribution limits are $4,400 for individual coverage and $8,750 for family coverage.8Internal Revenue Service. Notice 2026-5 Participants age 55 or older can contribute an additional $1,000. Employer contributions count toward these limits, so subtract what your employer puts in before figuring your own deductible amount.9Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans
Traditional IRA Contributions
Contributions to a traditional IRA may be fully or partially deductible depending on your income and whether you or your spouse participates in a workplace retirement plan. For 2026, the maximum contribution is $7,500, or $8,600 if you’re 50 or older.10Internal Revenue Service. Retirement Topics – IRA Contribution Limits If you’re covered by an employer plan, the deduction begins to phase out once your modified AGI reaches $81,000 for single filers or $129,000 for joint filers. If neither spouse has a workplace plan, there’s no income limit on the deduction.
Student Loan Interest
You can deduct up to $2,500 in interest paid on qualified education loans, even if you take the standard deduction.11Internal Revenue Service. Topic No. 456, Student Loan Interest Deduction The deduction phases out at higher incomes, and your lender sends Form 1098-E showing what you paid.
Educator Expenses
Eligible K–12 teachers, counselors, and principals who work at least 900 hours during the school year can deduct up to $300 in unreimbursed classroom expenses. If both spouses on a joint return are eligible educators, each can claim $300 for a combined $600.12Internal Revenue Service. Topic No. 458, Educator Expense Deduction Qualifying purchases include books, supplies, computer equipment, and professional development courses.
Documentation You Need to Keep
The IRS doesn’t ask for receipts when you file, but it can ask years later, and the burden of proof sits with you. Keep receipts, bank statements, canceled checks, and any other records that show the date, amount, and purpose of each expense.
Form 1098 covers mortgage interest. For charitable gifts of $250 or more, the written acknowledgment from the organization is required before filing. For medical expenses, an explanation of benefits from your insurer paired with proof of your out-of-pocket payment is ideal.
Keep these records for at least three years from the date you file, which matches the IRS’s standard audit window.13Internal Revenue Service. How Long Should I Keep Records If you underreported income by more than 25%, the window extends to six years. Property records should be kept until at least three years after you sell or dispose of the asset.
Digital records are acceptable, provided the system maintains legible, unaltered copies and you can produce them on request during an examination.14Internal Revenue Service. Revenue Procedure 97-22 Scanned receipts in a backed-up cloud folder work, but the files need to stay accessible for the full retention period. Using a third-party app doesn’t shift the responsibility to the app provider.
Penalties for Getting It Wrong
Honest mistakes and deliberate inflation of deductions are treated differently, but both can be expensive.
If the IRS decides you underpaid because of negligence or careless disregard of the rules, the accuracy-related penalty is 20% of the underpayment.15Office of the Law Revision Counsel. 26 U.S. Code 6662 – Imposition of Accuracy-Related Penalty on Underpayments Claiming a deduction you aren’t entitled to, even accidentally, can fall into this category if the IRS decides you didn’t make a reasonable attempt to follow the rules. Claiming $15,000 in charitable deductions with no acknowledgment letters behind them is the kind of thing that triggers it.
Fraud costs more. If any part of your underpayment is found to be fraudulent, the penalty jumps to 75% of the entire underpayment, and the IRS presumes the whole shortfall was fraudulent unless you can prove otherwise.16Internal Revenue Service. 9.5.13 Civil Considerations Interest runs on top of these penalties from the original due date.
The IRS selects returns for audit using both random sampling and computer screening that compares your return against statistical norms for similar filers.17Internal Revenue Service. IRS Audits Deductions that are unusually large relative to your income stand out in that screening. The protection isn’t skipping deductions you’re entitled to; it’s having the documentation ready to prove every dollar if the IRS asks.