CashoutGlossary / Itemized deduction
Itemized deduction
Expenses such as state and local taxes, mortgage interest, charity and large medical bills, listed on Schedule A instead of the standard deduction.
Itemizing means adding up allowable expenses on Schedule A instead of taking the flat standard deduction. You should itemize only if the total is more than your standard deduction, which for 2026 is $16,100 single or $32,200 married filing jointly.
Common itemized deductions:
- State and local income or sales taxes plus property taxes, limited to $40,400 for 2026 ($20,200 married filing separately). The limit shrinks above $505,000 of modified AGI but not below $10,000.
- Home mortgage interest
- Gifts to charity
- Medical and dental costs above 7.5% of your AGI
Many tipped workers come out ahead with the standard deduction. For 2026, people who don't itemize can also deduct up to $1,000 of charitable gifts ($2,000 married filing jointly), with certain other limits.
The tips and overtime deductions on Schedule 1-A don't depend on this choice. They're available whether you itemize or not.
Common mistake: mixing up business expenses with itemized deductions. If you're self-employed, mileage and supplies go on Schedule C, which you file either way. And married couples filing separately have to match: if one spouse itemizes, the other can't take the standard deduction.
Related terms
Standard deduction · Form 1040 · Schedule 1-A · Tax bracket
