How do I choose between standard and itemized deductions?
The rule is simple. Add up everything you can itemize. Compare it to the standard deduction for your filing status. Take whichever number is higher.
For 2024, the standard deduction is $14,600 for single filers, $29,200 for married filing jointly, and $21,900 for head of household. People 65 or older get an additional $1,550 to $1,950 depending on filing status. If your itemized deductions don’t exceed these amounts, take the standard deduction and move on.
Itemized deductions include state and local taxes paid (capped at $10,000), mortgage interest on your primary and second home, charitable contributions, and medical expenses that exceed 7.5% of your adjusted gross income. Casualty losses from federally declared disasters also count. That’s essentially the list after the 2017 tax law eliminated most other itemized deductions.
Most people don’t itemize anymore. The $10,000 SALT cap limits what you can deduct for state income taxes and property taxes combined. Unless you have a mortgage with significant interest payments or make substantial charitable gifts, you probably won’t clear the standard deduction threshold. A married couple would need over $29,200 in deductible expenses to benefit from itemizing. That’s a high bar.
You’re more likely to benefit from itemizing if you own a home with a mortgage, especially in the earlier years when interest makes up most of your payment. If you give generously to charity or had a year with major medical expenses, those can push you over the threshold too. Run the numbers both ways before deciding.
One strategy worth knowing is bunching deductions. If you’re close to the standard deduction amount, you might benefit from concentrating two years of charitable giving into one year. Itemize that year, take the standard deduction the next. This works well for people who are right on the edge.
Working with a Boise area enrolled agent helps when your situation isn’t straightforward. Multiple income sources, rental properties, or significant investment activity can complicate the calculation. And if you’re a business owner, remember that business deductions are separate from this decision entirely. Your business expenses reduce business income before any of this comes into play.
The personal tax preparation process should include this comparison automatically. A good preparer runs both scenarios and files whichever saves you more. If you’re doing your own taxes, don’t skip this step. The software usually handles it, but verify before you file.
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