Standard Deduction vs. Itemizing

Every taxpayer who files a federal income tax return may reduce their taxable income by either claiming the standard deduction or itemizing their deductions on Schedule A. You choose whichever method results in a larger total deduction and therefore lower taxable income. You cannot claim both.

The standard deduction is a fixed dollar amount that varies by filing status. For 2025, the standard deduction is $15,000 for single filers, $30,000 for married filing jointly, and $22,500 for head of household. Taxpayers age 65 or older receive an additional standard deduction of $2,000 (single) or $1,600 per spouse (married filing jointly). The standard deduction has increased substantially since the Tax Cuts and Jobs Act of 2017, which roughly doubled it and caused the percentage of taxpayers who itemize to drop from about 30% to roughly 10%.

Itemized deductions may include state and local taxes (SALT, capped at $10,000), mortgage interest on qualified residence debt, charitable contributions, and medical expenses that exceed 7.5% of adjusted gross income. Prior to the TCJA, the list of eligible itemized deductions was broader and included unreimbursed employee expenses, tax preparation fees, and other miscellaneous deductions. These were eliminated or suspended through 2025.

For many retirees, the decision between the standard deduction and itemizing may shift over time. Mortgage interest often decreases as the loan is paid down or paid off. Medical expenses may increase with age, potentially pushing total itemized deductions above the standard deduction threshold. Charitable contributions may also become more significant for retirees, though the qualified charitable distribution (QCD) strategy may be more tax-efficient than itemizing charitable gifts for those age 70 and a half or older.

A strategy called "bunching" involves concentrating itemizable expenses into alternating years to exceed the standard deduction in some years while taking the standard deduction in others. For example, you might contribute two years' worth of charitable gifts in a single year (perhaps through a donor-advised fund) to itemize in that year, then take the standard deduction the following year. This approach may produce a better overall tax outcome than spreading deductions evenly.