Standard deductions and itemised deductions both lower the tax you owe for the year. So, which one is better? Would it be more beneficial to itemise everything or opt for the standard deduction to simplify the process? We talk about when each choice is a good one. Standard Deduction vs. Itemized: Which Is Best
It’s important to remember that reputable tax software will help you make the choice by automatically picking the deduction that saves you the most money.
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The standard deduction is the answer for most Americans. Almost 90% of taxpayers only take the standard deduction because it’s the best option.
If you’re unsure about which tax software to use, refer to our list of the Best Tax Software to kickstart your journey. Standard Deduction vs. Itemized: Which Is Best
What Is the Standard Deduction?
The standard deduction is a way to reduce your taxable income in a given year. For example, a single person who earned $50,000 in 2025 receives a $15,750 standard deduction. That means that person will pay taxes on $34,250 ($50,000 minus $15,750). Standard Deduction vs. Itemized: Which Is Best
No matter how much or little you earn in a given year, you can claim a standard deduction.
Note:Â The OBBBA retroactively increased the 2025 and 2026 standard deduction.
The standard deduction is standard for a reason. Most people won’t find more than $15,750 worth of expenses that they can itemise. The few people that can itemise are typically people who give generously to charity and live in counties with high property or income taxes. Standard Deduction vs. Itemized: Which Is Best
What Does It Mean to Itemise Taxes?
Itemising your taxes means that you are using valid personal expenses to claim a deduction that is larger than the standard deduction. When you claim a larger deduction, you pay less in taxes, so it’s obviously better to itemise your taxes when you can.
However, only certain expenses can be itemised. The most common expenses that people itemise include the following:
- Charitable contributions
- Mortgage interest (on up to $750,000 of mortgage)
- State and local income taxes or sales tax
- Property taxes
- Medical expenses (worth over 10% of your income)
When these types of expenses add up to more than the standard deduction, it makes sense to itemise your tax return.
If you don’t know if you have more itemisations than your standard deduction, your tax software choice will ask you to enter all your information, then show you the difference. Standard Deduction vs. Itemized: Which Is Best
Reducing Taxes Without Itemizing
Itemising isn’t the only way to reduce your tax bill. There are plenty of legal ways to reduce your taxable income. We have a full list of the best tax breaks that currently exist today.
For example, if you contribute money to a workplace retirement plan — like a 401(k) — or a traditional IRA, you can deduct the contribution from your gross income. That means the person who earned $50,000 and contributed $5,000 to her 401(k) will pay taxes on $29,250 ($50,000 minus the $15,750 standard deduction minus the $5,000 retirement contribution deduction). Standard Deduction vs. Itemized: Which Is Best
And that’s just one example of many. In addition to retirement savings, you can deduct legitimate business expenses in your Schedule C (such as driving expenses, materials, equipment, and more for your side hustle). Contributing to a health savings account is a great way to save for medical expenses and avoid taxes.
Other deductions that you can claim without itemising include educator expenses (for classroom supplies), student loan interest, and alimony you’ve paid.
These deductions are called “above-the-line” deductions and are a great way to reduce your tax bill. The “above-the-line” deductions can be combined with your standard deduction, so it makes sense to load up on the above-the-line deductions (where you legally can, of course). Standard Deduction vs. Itemized: Which Is Best
Strategic Planning to “Load Up” When You Itemize
With the new larger standard deductions, figuring out years to itemise can be a challenge. But you may find it advantageous to itemise in some years and not others. If that’s you, some strategic financial decisions can help you maximize the advantage of itemising in certain years. Standard Deduction vs. Itemized: Which Is Best
For example, if you buy a house and pay $3,000 in points (prepaid interest), plus $2,000 in mortgage interest, plus $2,000 in property tax, and $8,000 in state income tax, it could make sense to itemise.
But you can boost that tax advantage by doubling up on charitable contributions. For example, if you donate $5,000 per year, consider donating $10,000 in the year you bought the house (maybe make a donation at the beginning and at the end of the year – making up for the prior or future year missed). That gives you $5,000 extra to itemise. Then in the next year, you can drop to the standard deduction if it makes sense.
Timing big expenses (such as buying a house or having big surgeries or other expenses) with big giving opportunities can help you maximize the benefit of itemising in the years it makes sense. Standard Deduction vs. Itemized: Which Is Best
Final Thoughts
It can be hard to know whether it makes sense to take the standard deduction or to itemise at first glance. However, tax software makes this decision easy and automatic. Standard Deduction vs. Itemized: Which Is Best
But every tax software package will help you figure out which is right for you by asking you a series of questions. If you don’t know what software is right for you, check out our guide to the best tax software. Standard Deduction vs. Itemized: Which Is Best