Standard vs. Itemized Deduction: Which One Saves You More?

Every year you choose between the standard deduction and itemizing, and you take whichever is larger. Here's how to think about it.

The standard deduction

This is a flat amount based on your filing status. Most people take it because it's simple, and recent increases made it large enough that it wins for the majority of filers.

Itemizing

Itemizing means adding up specific deductions on Schedule A. The big ones are mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and medical expenses above a set percentage of your income.

When itemizing usually wins

It tends to pay off for homeowners with a sizable mortgage, people who give a lot to charity, and anyone who had high medical bills during the year.

The bottom line

There's no need to guess. I calculate your taxes both ways and file whichever puts more money back in your pocket, with the documentation to support it.