What Expenses Are Included in Itemized Deductions?

Itemized deductions are specific expenses you subtract from your adjusted gross income on Schedule A instead of taking the standard deduction. The expenses included in itemized deductions fall into six categories: state and local taxes, home mortgage interest, medical and dental expenses, charitable contributions, casualty and theft losses from federally declared disasters, and gambling losses.¹ Several of these categories changed under the One Big Beautiful Bill Act, so the 2026 rules look different from recent years.

Should You Itemize at All?

Itemizing only pays off if your qualifying expenses add up to more than the standard deduction for your filing status.² For 2026, the standard deduction is $32,200 for married filing jointly, $16,100 for single filers and married filing separately, and $24,150 for head of household.³ Filers who are 65 or older or legally blind get additional amounts on top.

Before tracking receipts, add up your likely Schedule A total and compare. If you’re close to the line, you can “bunch” deductible expenses like charitable gifts and elective medical procedures into a single year to clear the threshold, then take the standard deduction the next year.

State and Local Taxes (SALT)

Three kinds of non-federal taxes qualify: state and local income taxes (or general sales taxes, as an alternative), real estate property taxes, and personal property taxes based on value, such as the value-based portion of a vehicle registration fee.⁴

You have to pick between state income tax and state sales tax; you cannot deduct both. The sales tax option is most useful if your state has no income tax. If you go that route, you can total actual receipts or use the IRS sales tax tables and then add tax paid on large purchases like vehicles or boats.

All three categories share one combined cap. For 2026, the ceiling is $40,400 ($20,200 for married filing separately), so a taxpayer paying $25,000 in state income tax and $20,000 in property tax still stops at $40,400.⁴ The cap rises 1% a year through 2029, then reverts to $10,000 in 2030 unless Congress acts. For modified AGI above roughly $505,000, the cap is reduced by 30% of income over that threshold but never drops below $10,000.

Some payments that feel like taxes don’t qualify. Federal income tax, Social Security tax, and Medicare tax are never deductible on Schedule A, and neither are fees for services like trash collection, parking tickets, or licensing fees. Foreign income taxes go on Form 1116 as a credit instead.⁵

Home Mortgage Interest

Interest on a mortgage for your main home or one additional residence is deductible, which makes this one of the largest write-offs for homeowners. The debt must be “acquisition debt,” meaning you used the loan to buy, build, or substantially improve the home that secures it. Routine maintenance doesn’t count; the work has to add value or meaningfully extend the home’s useful life.⁶

The deduction covers interest on up to $750,000 of acquisition debt ($375,000 if married filing separately). Mortgages taken out on or before December 15, 2017 are grandfathered under the older $1 million limit ($500,000 married filing separately), and if you have both grandfathered and newer debt, the newer limit is reduced by the outstanding balance of the older loan.⁷ Your lender reports the interest you paid on Form 1098.⁸

Home Equity Loans and HELOCs

Interest on a home equity loan or HELOC is deductible only if you used the money to buy, build, or substantially improve the home securing the loan.⁶ A HELOC used to pay off credit cards or fund a vacation doesn’t qualify. Keep records tying the loan proceeds to the improvement project, because the IRS puts the burden of proof on you.

Points and Mortgage Insurance

Points are prepaid interest paid at closing to lower your rate. Points on a mortgage for your primary residence can often be deducted in full the year you pay them. Points on a refinance or second home are generally deducted over the life of the loan, and they only qualify if they represent prepaid interest rather than a service fee.

Starting in 2026, private mortgage insurance premiums are deductible again. The One Big Beautiful Bill Act made this deduction permanent after years of expirations and retroactive renewals. PMI premiums on acquisition debt are now treated like mortgage interest. If you put less than 20% down on a conventional loan, this is worth tracking.

Medical and Dental Expenses

You can deduct unreimbursed medical and dental expenses, but only the amount above 7.5% of your AGI. That floor is where most medical deduction hopes die. If your AGI is $100,000, you need more than $7,500 in qualifying costs before anything is deductible, and only the excess goes on Schedule A.⁹

Qualifying costs cover diagnosis, treatment, and prevention of disease: doctor and hospital visits, prescriptions, dental work, eyeglasses, hearing aids, certain long-term care services, and travel to and from medical appointments (including mileage at the IRS medical rate). Health insurance premiums qualify if you paid them with after-tax dollars. Premiums deducted pre-tax from your paycheck and expenses reimbursed through an HSA or FSA don’t count. No double-dipping.

Timing follows payment, not service. A December surgery billed in January is a deduction for the following year. Insurance reimbursements reduce the deductible amount, and if a reimbursement arrives after you’ve already deducted the expense, you may need to pick it up as income the next year.

Charitable Contributions

Donations to qualifying tax-exempt organizations are deductible. Political organizations, lobbying groups, and gifts to individuals never qualify. You can verify an organization’s status through the IRS Tax Exempt Organization Search tool.¹⁰

How much you can deduct in a single year is capped as a percentage of your AGI, with the percentage depending on what you gave:

Cash to public charities: up to 60% of AGI
Noncash property to public charities: up to 50% of AGI
Appreciated capital gain property at fair market value: up to 30% of AGI
Contributions to certain private foundations and veterans’ organizations: up to 30% of AGI
Capital gain property “for the use of” a qualifying organization: up to 20% of AGI

The 60% cash limit is permanent, and contributions above any applicable cap carry forward up to five years.¹¹

Documentation rules are strict. Every cash gift needs a bank record, receipt, or written communication from the charity. Any single contribution of $250 or more requires a written acknowledgment from the organization stating the amount or describing the property and noting whether you received anything in return. Noncash donations over $5,000 require a qualified appraisal.¹⁰ Without proper paperwork, the deduction is gone. Cash in a collection plate and informal fundraiser donations catch people here; get a receipt every time.

When you receive something in return, you can only deduct the amount above what you got. A $200 gala ticket that includes a $75 dinner yields a $125 deduction, and the charity has to give you a good-faith estimate of what it provided.¹²

Casualty and Theft Losses

Personal casualty and theft losses are deductible only in narrow circumstances. The loss must come from a federally declared disaster or, starting in 2026, a disaster declared by your state’s governor and recognized by the Secretary of the Treasury.¹³ A stolen bicycle or ordinary storm damage outside a declared disaster area generally does not qualify.

When a loss does qualify, two reductions apply. Each separate casualty event is reduced by $100, and total net losses for the year must exceed 10% of your AGI, with only the excess deductible. Insurance reimbursements reduce the loss dollar-for-dollar, so you have to file an insurance claim first. The loss goes on Form 4684.

One exception: if you have casualty gains (insurance payouts exceeding your basis in destroyed property), you can deduct casualty losses even outside a declared disaster, up to the amount of those gains.¹³

Gambling Losses

Gambling winnings are fully taxable, and losses can offset them if you itemize. The old rule capped the deduction at the amount of your reported winnings. Starting in 2026, the One Big Beautiful Bill Act tightened this: you can now deduct only 90% of your gambling losses, even when losses exceed winnings. The remaining 10% is simply gone and does not carry forward.

The result is what tax professionals call phantom income. Win $10,000 and lose $10,000 at the same casino over the year, and you still owe tax on $1,000, because only $9,000 of the losses is deductible. Recreational gamblers who used to break even on paper now owe something.

To claim any gambling loss, keep an accurate diary of winnings and losses with supporting receipts, tickets, and statements.¹⁴ Casino win/loss statements help but aren’t enough on their own. The IRS wants contemporaneous records, not a year-end reconstruction.

Recordkeeping That Actually Pays Off

Itemizing is a documentation exercise. The deductions exist, but they only help you if you can prove them. Keep a folder or digital scan system through the year for property tax bills, Form 1098, medical receipts, charitable acknowledgments, and gambling logs. AGI drives most of the limits above (the 7.5% medical floor, the charitable percentage caps, the SALT phase-down, the 10% casualty floor), so anything that lowers AGI expands what you can deduct.¹⁵

1
Internal Revenue Service. Schedule A (Form 1040) – Itemized Deductions
2
Internal Revenue Service. Topic No. 551, Standard Deduction
3
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
4
Internal Revenue Service. Topic No. 503, Deductible Taxes
5
Internal Revenue Service. Foreign Tax Credit
6
Internal Revenue Service. Publication 936, Home Mortgage Interest Deduction
7
Office of the Law Revision Counsel. 26 USC 163 – Interest
8
Internal Revenue Service. Instructions for Form 1098
9
Internal Revenue Service. Topic No. 502, Medical and Dental Expenses
10
Internal Revenue Service. Topic No. 506, Charitable Contributions
11
Internal Revenue Service. Publication 526, Charitable Contributions
12
Internal Revenue Service. Charitable Contributions – Quid Pro Quo Contributions
13
Congress.gov. The Nonbusiness Casualty Loss Deduction
14
Internal Revenue Service. Topic No. 419, Gambling Income and Losses
15
Internal Revenue Service. Instructions for Schedule A (Form 1040)