Changes to the Standard Deduction for Tax Year 2026

Aug 13

5 min read

When It May Be Better to Itemize Deductions Instead of Taking the Standard Deduction

Each year, taxpayers must determine how they will reduce their taxable income before calculating their federal income tax.

One of the most important decisions is choosing between taking the standard deduction or itemizing deductions on Schedule A (Form 1040).

For tax year 2026, the standard deduction includes changes that may influence this decision. This means taxpayers should carefully review their expenses and available deductions before choosing an option.

Although the standard deduction continues to be the simplest alternative for many people, in certain situations itemizing deductions may be more beneficial.

What Is the Standard Deduction?

The standard deduction is an amount established according to the taxpayer’s filing status.

Its main advantage is that it allows taxpayers to reduce taxable income without having to list certain personal expenses individually that may otherwise qualify as deductions.

For this reason, many taxpayers use this option.

However, choosing the standard deduction simply because it is easier does not necessarily mean it will always be the most favorable option.

What Does It Mean to Itemize Deductions?

Itemizing means calculating certain allowable deductions individually and reporting them on Schedule A (Form 1040).

In general, taxpayers should compare the total amount of allowable itemized deductions with the standard deduction available to them.

When itemized deductions exceed the available standard deduction, itemizing may provide a better tax result.

If the opposite is true, the standard deduction will generally be more beneficial.

What Expenses May Make Itemizing Worthwhile?

Not all personal expenses are deductible.

Schedule A includes certain categories that, depending on the taxpayer’s circumstances and applicable limitations, may include:

Certain medical and dental expenses.
Allowable state and local taxes.
Real estate taxes.
Certain mortgage interest.
Contributions made to qualified charitable organizations.
Certain disaster-related losses that meet the applicable requirements.
Other deductions specifically allowed under tax law.

Each category has its own rules, requirements, and limitations.

For this reason, having an expense does not automatically mean that the full amount can be deducted.

State and Local Taxes May Influence the Decision

State and local taxes, commonly known as SALT, can be an important factor when determining whether itemizing makes sense.

This may be especially relevant for taxpayers who live in states with relatively high taxes or who own property subject to real estate taxes.

When these taxes are combined with other allowable deductions, such as mortgage interest or charitable contributions, the total amount of itemized deductions may increase significantly.

For this reason, taxpayers should not automatically assume that taking the standard deduction will always be the best option.

Owning a Home Can Change the Outcome

Homeowners are among the taxpayers who should pay particular attention when comparing these two options.

Depending on their circumstances, they may have real estate taxes, mortgage interest, and other amounts that may be included on Schedule A.

Individually, each expense may not be enough to make itemizing worthwhile.

However, when several allowable deductions are combined, the result may change.

For this reason, homeowners should review the total amount of their deductions before filing their tax return.

Medical Expenses May Also Be Important

Certain medical and dental expenses may qualify as itemized deductions.

However, there are requirements and limitations related to the taxpayer’s income.

This means that not all medical expenses paid during the year will necessarily result in a deduction.

In years when a taxpayer faces unusually high medical expenses, it may be especially important to determine whether those expenses, together with other deductions, make itemizing more favorable.

Charitable Contributions Should Also Be Reviewed

Donations made to qualified organizations may also influence the decision to itemize.

However, the rules related to charitable contributions may vary depending on the type of contribution, the organization receiving it, and the applicable limitations.

In addition, tax year 2026 includes tax changes related to certain charitable contributions.

For this reason, taxpayers should keep receipts, acknowledgment letters, and any other documentation that can support donations made during the year.

A Year With Unusual Expenses May Change the Strategy

The best option does not necessarily have to be the same every year.

A taxpayer may use the standard deduction for several years and then choose to itemize in a year when deductible expenses are significantly higher.

This could happen, for example, when there are:

Unusually high medical expenses.
Higher charitable contributions.
Significant mortgage interest.
High state and local taxes.
A significant combination of different allowable deductions.

For this reason, taxpayers should not automatically use the same strategy they used on the previous year’s return.

Each tax year should be evaluated independently.

Compare Both Options Before Filing

One of the best practices is to calculate both alternatives before filing the tax return.

First, taxpayers should identify the standard deduction that applies to their filing status.

Then, all allowable itemized deductions should be calculated correctly.

Once both amounts have been determined, they can be compared to identify which option provides the greater reduction in taxable income.

This comparison may help prevent taxpayers from missing out on a larger deduction simply because they automatically chose the standard deduction.

Not All Deductions Are Reported on Schedule A

It is also important to understand that some deductions may be available regardless of whether the taxpayer takes the standard deduction or chooses to itemize.

For this reason, not every new tax provision related to deductions should be confused with Schedule A deductions.

Each tax benefit should be reviewed individually to determine where it is claimed and what requirements apply.

Keep Your Documentation

If there is a possibility that itemizing may be beneficial, taxpayers should keep their documentation organized throughout the year.

Important records may include:

Mortgage-related statements.
Real estate tax records.
State tax records.
Receipts and acknowledgment letters related to donations.
Documentation of certain medical expenses.
Other records related to potential deductions.

Having this information organized will make it easier to compare the standard deduction with itemized deductions when preparing the tax return.

Mistakes to Avoid

Some of the most common mistakes when deciding between the two options include:

Automatically taking the standard deduction without comparing.
Assuming that all personal expenses are deductible.
Failing to keep proper documentation.
Believing that having a mortgage automatically means itemizing is better.
Failing to review the limitations that apply to each deduction.
Using the same strategy as the previous year without reviewing tax law changes.
Confusing other deductions with those reported on Schedule A.

The decision should be based on each taxpayer’s actual numbers and circumstances.

Conclusion

Changes to the standard deduction for tax year 2026 make it especially important to compare both alternatives before filing a tax return.

For many taxpayers, the standard deduction will continue to be the simplest and most beneficial option.

However, taxpayers with state and local taxes, mortgage interest, eligible medical expenses, charitable contributions, or other allowable deductions may benefit from determining whether itemizing provides a better result.

The key is to avoid automatically assuming which option is best.

Reviewing the taxpayer’s situation, correctly calculating available deductions, and comparing both methods can help determine which option allows the taxpayer to make better use of the tax benefits available for 2026.