Itemized tax deductions are specific personal expenses you list on Schedule A of your federal return to lower your taxable income, used in place of the flat standard deduction. They only save you money when your qualifying expenses add up to more than the standard deduction for your filing status. For 2026, that threshold is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 The main categories that qualify are medical expenses, state and local taxes, mortgage interest, and charitable contributions, and each carries its own caps, floors, and paperwork requirements.
Deciding Whether to Itemize
The choice is arithmetic. Total up everything you can legitimately deduct across all categories, compare it to your standard deduction, and pick whichever is larger. Most taxpayers take the standard deduction because their qualifying expenses fall short of it. People who tend to clear the bar usually have some combination of a large mortgage, high state and local tax bills, or significant charitable giving.
One filing-status rule catches people off guard. If you’re married filing separately and your spouse itemizes, you must itemize too, even if the standard deduction would have been better for you.2Internal Revenue Service. Other Deduction Questions Couples in that filing status should coordinate before either return goes in.
A planning strategy called “bunching” can help borderline filers get more out of both options. The idea is to concentrate deductible expenses (usually charitable donations, sometimes elective medical procedures) into one year so the total clears the standard deduction, then take the standard deduction in the off year. It requires forethought, but for people whose annual expenses land just under the threshold, it can produce a real difference over time.
Medical and Dental Expenses
Medical costs are deductible, but only the portion that exceeds 7.5% of your adjusted gross income. If your AGI is $100,000, the first $7,500 in medical expenses gives you nothing; only dollars above that count toward your itemized total.3Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses In practice, this makes the deduction useful mainly in years with unusually heavy healthcare costs.
Qualifying expenses are broad: doctor and hospital visits, surgeries, prescription drugs, dental work, vision correction, mental health treatment, and long-term care services. Health insurance premiums you pay out of pocket (not through a pre-tax employer plan) count, and so does transportation to appointments. For 2026, the IRS standard mileage rate for medical travel is 20.5 cents per mile.4Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents per Mile, Up 2.5 Cents Only unreimbursed expenses qualify. Anything an insurer or employer paid back is off the table.3Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses
State and Local Taxes (SALT)
The state and local tax deduction lets you deduct what you pay in property taxes plus either state income taxes or state sales taxes, whichever produces the larger figure.5Office of the Law Revision Counsel. 26 USC 164 – Taxes Residents of states without an income tax almost always come out ahead deducting sales taxes; people in high-income-tax states usually go the other way.
For 2026, the combined SALT deduction is capped at $40,400 for most filers and $20,200 for married filing separately.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 That’s a large increase from the $10,000 cap in place from 2018 through 2024, under the One Big Beautiful Bill Act. The cap rises by roughly 1% each year through 2029, then drops back to $10,000 in 2030.
High earners face a phasedown. Once modified adjusted gross income exceeds $505,000 ($252,500 for married filing separately), the $40,400 cap starts shrinking until it hits a floor of $10,000. Taxpayers well above that threshold are effectively back at the old limit.
Mortgage Interest
You can deduct interest paid on mortgage debt used to buy, build, or substantially improve a primary or secondary residence. For loans taken out after December 15, 2017, the deductible debt is capped at $750,000, or $375,000 if married filing separately.6Internal Revenue Service. Publication 936 (2025), Home Mortgage Interest Deduction Older mortgages from before that date may still qualify under the previous $1 million limit.
Interest on a home equity loan or line of credit is deductible only when the borrowed money was used to improve the home securing the loan. If you tapped a HELOC to pay off credit cards or fund a vacation, that interest doesn’t qualify. This restriction, originally part of the 2017 tax law changes, has been made permanent.
Your lender sends Form 1098 each year showing the mortgage interest and points you paid.7Internal Revenue Service. Form 1098 (Rev. April 2025) – Mortgage Interest Statement Points paid at closing on a home purchase are generally deductible in the year paid; refinancing points are typically spread over the life of the loan. Keep the 1098 with your records, because it’s the primary document the IRS will ask about if a mortgage interest claim is questioned.
Charitable Contributions
Donations to qualified tax-exempt organizations are deductible when you itemize. Eligible recipients include religious organizations, educational institutions, nonprofit hospitals, and groups organized under Section 501(c)(3).8Office of the Law Revision Counsel. 26 USC 170 – Charitable, Etc., Contributions and Gifts Both cash and noncash donations qualify, with noncash items valued at fair market value. Out-of-pocket costs while volunteering count too, including mileage driven for a charity at the 2026 rate of 14 cents per mile.4Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents per Mile, Up 2.5 Cents
Charitable deductions are capped at a percentage of your AGI, and the ceiling depends on what you gave and where. Cash donations to most public charities can be deducted up to 60% of AGI. Gifts of appreciated property to the same organizations cap at 30%, and certain contributions to private foundations are limited to 20%.9Internal Revenue Service. Publication 526 (2025), Charitable Contributions – Section: Limits on Deductions Amounts above the limit in a given year can be carried forward for up to five years.
Starting in 2026, a new floor applies. Your charitable deductions only count to the extent they exceed 0.5% of your AGI. If your AGI is $200,000, the first $1,000 in donations produces no deduction, and only amounts above that reduce your taxable income. That’s a meaningful change for moderate donors who used to deduct every dollar they gave.
Documentation for Charitable Gifts
Any monetary donation, regardless of size, needs a bank record or written receipt showing the organization’s name, the amount, and the date. When a single donation reaches $250 or more, you need a written acknowledgment from the charity before you file. That acknowledgment must state whether you received anything in return for the gift and, if so, its estimated value.10Internal Revenue Service. Topic No. 506, Charitable Contributions
Noncash donations add more requirements. If your total deduction for noncash gifts exceeds $500, file Form 8283 with your return.11IRS. Instructions for Form 8283 For any single item or group of similar items valued above $5,000, you need a qualified appraisal from a credentialed appraiser, signed and dated no earlier than 60 days before the donation and no later than the filing deadline. Art donations valued at $20,000 or more require the appraisal to be attached directly to Form 8283.12Internal Revenue Service. Publication 561 – Determining the Value of Donated Property
Other Deductible Categories
Beyond the four main categories, a handful of other expenses can be itemized under their own rules.
Casualty and Theft Losses
Personal casualty and theft losses from events like fires, storms, or break-ins are deductible only if caused by a federally declared disaster. That restriction, originally temporary, is now permanent. Starting in 2026, the scope broadens modestly to include losses from certain state-declared disasters. Each qualifying loss must be reduced by $100, and your total net losses must exceed 10% of AGI before any deduction applies.13Internal Revenue Service. Publication 547 – Casualties, Disasters, and Thefts
Gambling Losses
Gambling losses are deductible, but only up to the amount of gambling winnings you report as income. If you won $8,000 at a casino and lost $12,000 during the year, your deductible loss is $8,000, not $12,000. Starting in 2026, only 90% of qualifying losses are deductible, even when they fall below your total winnings. Losses are claimed on Schedule A, and you need records like receipts, tickets, or detailed logs to substantiate them.
Investment Interest
Interest paid on money borrowed to purchase taxable investments (margin interest is the common example) is deductible up to the amount of your net investment income for the year. Any excess carries forward. You calculate this on Form 4952 and transfer the result to Schedule A.
Expenses You Can No Longer Deduct
Before 2018, taxpayers could deduct a broad category of “miscellaneous itemized deductions” above a 2% AGI floor. That group included unreimbursed employee business expenses, tax preparation fees, investment advisory fees, safe deposit box rental, and union dues. The 2017 tax law suspended these deductions, and the One Big Beautiful Bill Act made the elimination permanent.14Internal Revenue Service. Simplified Option for Home Office Deduction They are not coming back.
This hits W-2 employees who work from home hardest. The home office deduction still exists for self-employed taxpayers, but regular employees cannot deduct home office costs, work-related travel, professional development, or any other unreimbursed business expense on their personal returns.14Internal Revenue Service. Simplified Option for Home Office Deduction Tax preparation fees are also gone as a personal deduction, though fees for preparing a business return (like Schedule C) remain deductible as a business expense.
Limits for High-Income Filers
Starting in 2026, taxpayers in the highest marginal tax bracket face a cap on the value of their itemized deductions. Instead of each dollar deducted saving them at their full marginal rate, the tax benefit is limited to 35 cents per dollar. For someone in the top bracket, that reduces the value of every itemized deduction by a few percentage points compared to what it would otherwise be worth.
High earners also face the SALT phasedown described earlier: once modified AGI exceeds $505,000 ($252,500 for married filing separately), the $40,400 SALT cap begins to shrink. Together, these provisions compress the benefit of itemizing at very high income levels even when raw expenses are large. The older “Pease limitation,” which used to reduce total itemized deductions for high earners, was permanently eliminated and does not apply.
Gathering Documentation
Claiming itemized deductions without records invites problems in an audit. Each category has its own paper trail, and keeping things organized throughout the year is much easier than reconstructing them at filing time.
- Medical expenses: receipts for co-pays, hospital bills, prescriptions, insurance premiums paid out of pocket, and a mileage log for appointments.
- SALT: property tax bills with proof of payment, your W-2 (which shows state income tax withheld), and records of estimated state tax payments.
- Mortgage interest: Form 1098 from your lender showing interest and points paid.15Internal Revenue Service. Instructions for Form 1098 (12/2026)
- Charitable gifts: bank statements or receipts for cash donations, written acknowledgments for gifts of $250 or more, and Form 8283 with appraisals for noncash donations above the thresholds.10Internal Revenue Service. Topic No. 506, Charitable Contributions
- Casualty losses: photos of damage, insurance claims and settlement letters, and repair estimates or invoices.
Keep all supporting records for at least three years from the date you file, which matches the standard audit window.16Internal Revenue Service. Topic No. 305, Recordkeeping If you underreport income by more than 25%, the IRS has six years to examine the return, so holding records longer is prudent if any income figures are uncertain.17Internal Revenue Service. How Long Should I Keep Records?
Reporting on Schedule A
Everything gets reported on Schedule A (Form 1040), divided into sections that match the deduction categories: medical, taxes, interest, charitable gifts, casualty losses, and other deductions.18Internal Revenue Service. About Schedule A (Form 1040), Itemized Deductions Your total from Schedule A carries to the main Form 1040, where it replaces the standard deduction in calculating taxable income. Tax software handles the comparison automatically and will usually tell you which option saves more. If you file on paper, attach Schedule A to your return. Mismatches between your claimed amounts and documents like Form 1098 are a common trigger for IRS notices, so check that your numbers line up with your paperwork before filing.