Tax Deductions
Choose between the standard deduction and itemizing, and claim the deductions anyone can take.
TL;DR
- Take the larger of the
standardDeductionor your itemized total. - Claim
aboveTheLinedeductions first; everyone gets them, itemizer or not. - Value any deduction at your
marginalRate, not dollar for dollar.
How Deductions Work
Lower Taxable IncomeA deduction shrinks the income your tax brackets apply to.
Income - deductions = taxableWorth Your Top RateEach deducted dollar saves you your marginal tax rate.
$1,000 x 22% bracket = $220 savedPick One PathYou choose the standard deduction or itemize, never both.
Larger of standard or itemizedAbove-the-LineThese reduce your income before you choose a path.
Available to every filer2026 Standard Deduction
SingleThe flat amount unmarried filers subtract with no receipts needed.
$16,100Married Filing JointlyDouble the single amount for couples on one return.
$32,200Head of HouseholdA larger deduction for single parents and qualifying caregivers.
$24,150Age 65 or OlderOlder filers add an extra amount, plus a temporary senior deduction.
+$2,050 single, +$6,000 seniorCommon Itemized Deductions
Mortgage InterestInterest on up to $750,000 of home loan debt counts.
Found on your Form 1098State and Local TaxesIncome or sales tax plus property tax, up to a cap.
SALT cap: $40,400 in 2026Charitable GiftsDonations to qualified charities count if you keep records.
Get a receipt for gifts of $250+Medical ExpensesOnly costs above a share of your income are deductible.
Costs above 7.5% of AGIDeductions Without Itemizing
Student Loan InterestDeduct interest you paid on qualified student loans.
Up to $2,500 a yearHSA ContributionsMoney you put in an HSA outside payroll is deductible.
$4,400 self / $8,750 familyTips and OvertimeQualified tips and overtime premium pay are partly deductible through 2028.
Tips to $25,000, overtime to $12,500Charity, No ItemizingStarting in 2026, cash gifts count even with the standard deduction.
$1,000 single / $2,000 jointTips
- Bunch two years of charitable gifts into one year if your
itemizedtotal sits just below the standard deduction. - Fund an
HSAif you have a qualifying health plan; it lowers taxable income whether or not you itemize.
Warnings
- Do not itemize just because you have a mortgage; unless the total beats the
standardDeduction, it saves you nothing. - State and local taxes are capped under the
SALTlimit, so a large property tax bill may not count in full.
In Practice
Compare a homeowner's itemized deductions with the standard deduction, then add an HSA on top.
You are single in the 22% bracket, paid $10,000 in mortgage interest and $7,000 in state and property taxes, and put $3,000 in an HSA.
- Add itemized deductions: $10,000 + $7,000 = $17,000.
- Compare: $17,000 beats the $16,100 standard deduction by $900.
- Value the gap: $900 x 22% = $198 saved by itemizing.
- Add the HSA: $3,000 x 22% = $660 saved, itemizing or not.
Itemizing plus the HSA saves you $858 in federal tax.
Itemize only when you beat the standard deduction; take above-the-line deductions always.
FAQ
A deduction reduces your taxable income, so it saves you the deduction times your top tax rate. A $1,000 deduction in the 22% bracket saves $220, not $1,000. That is the key difference from a credit, which cuts your tax bill dollar for dollar.
Add up your possible itemized deductions, mainly mortgage interest, state and local taxes, charity, and large medical bills. If the total beats your standard deduction, itemize; if not, take the standard. For 2026 the standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
Above-the-line deductions like student loan interest, HSA contributions, and deductible IRA contributions reduce your income whether or not you itemize. Several newer deductions also work alongside the standard deduction, including qualified tips, qualified overtime pay, and an extra deduction for people 65 and older. Starting in 2026, non-itemizers can also deduct up to $1,000 of cash gifts to charity, or $2,000 if married filing jointly.
You can deduct up to $40,400 of combined state and local income, sales, and property taxes if you itemize. The cap shrinks for households with income above about $505,000. It only matters if you itemize, since the standard deduction already replaces it.