Should You Itemize? Most People Don't Anymore
For decades, itemizing was a normal part of filing taxes for homeowners and families with good incomes. Mortgage interest, property taxes, and charitable gifts went on Schedule A, and the total usually beat the standard deduction. Then, in 2018, the standard deduction nearly doubled. IRS data shows what happened next: most people stopped itemizing almost overnight.
The rules changed again in 2025 and 2026. The cap on state and local tax deductions went up, and charitable gifts are now treated differently. So the question is worth asking fresh: should you itemize?
What the data says • In 2017, 30.6% of individual returns itemized. In 2018, that fell to 11.4%. By 2023, it was 9.4%. • About 29.3 million fewer returns itemized in 2018 than in 2017. • Even among filers earning $100,000 to $200,000, only 18% itemized in 2023, down from 76% in 2017. • Most filers with income of $500,000 or more still itemize. Source: IRS Statistics of Income, Publication 1304 and Table 1.2. |
How the choice works
Every filer gets to subtract something from income before tax is figured. You can take the standard deduction, a flat amount set by law. Or you can itemize, which means adding up specific expenses the law allows. You take whichever is larger, and you can't take both.
For 2025, the standard deduction is $15,750 for single filers, $31,500 for married couples filing jointly, and $23,625 for heads of household. For 2026, those amounts rise to $16,100, $32,200, and $24,150. Itemizing only helps if your allowed expenses add up to more than that.
The most common itemized deductions are:
State and local taxes, including income or sales tax and property tax, up to a cap
Mortgage interest on up to $750,000 of home debt
Charitable gifts
Medical expenses above 7.5% of your adjusted gross income
Itemizing went from common to rare
From 2013 through 2017, about 30% of returns itemized every year. In 2017, that was 46.9 million returns. In 2018, the number fell to 17.5 million, a drop of 29.3 million in a single year. It has stayed near 9% to 11% since.
Two changes in the 2017 tax law caused this. The standard deduction nearly doubled. At the same time, the deduction for state and local taxes was capped at $10,000. For many households, the state and local tax deduction had been the biggest item on Schedule A. With it capped and the standard deduction much larger, itemizing stopped making sense for tens of millions of people.
Who still itemizes
The drop hit every income group, but not equally.
Middle incomes changed the most. Among filers earning $100,000 to $200,000, the share who itemize fell from 76% to 18%. For filers earning $75,000 to $100,000, it fell from 53% to 12%.
Lower incomes almost never itemize now. Only about 2% of filers under $50,000 itemized in 2023.
High incomes still often itemize. About 52% of filers earning $500,000 to $1 million itemized in 2023, and 68% of those earning $1 million or more. Large mortgages, big charitable gifts, and high state taxes push them past the standard deduction.
One caution on the chart: the income groups are in each year's dollars, so a household in the $75,000 to $100,000 group in 2017 might land one group higher in 2023 after raises and inflation. That doesn't change the main finding. At every income level, far fewer people itemize than before.
What changed for 2025 and 2026
The 2023 data shows the world before the most recent tax law. Several changes since then could push some households back toward itemizing, and a few push the other way.
The state and local tax cap went up. For 2025, the cap rose from $10,000 to $40,000 ($20,000 if married filing separately). For 2026, it is $40,400. This is the change most likely to bring people back to itemizing, especially homeowners in high-tax states like California.
There are two limits. First, the cap shrinks for higher earners. It drops by 30 cents for every dollar of modified adjusted gross income above $500,000 ($505,000 in 2026), but it never goes below $10,000. Second, the higher cap is temporary. Under current law, it returns to $10,000 starting in 2030.
Non-itemizers get a charitable deduction. Starting in 2026, people who take the standard deduction can also deduct up to $1,000 of cash gifts to charity ($2,000 for married couples filing jointly). The gifts must be cash to public charities. Gifts to donor-advised funds and to supporting organizations don't count.
Itemizers face a new charitable floor. Also starting in 2026, people who itemize can only deduct charitable gifts above 0.5% of their adjusted gross income, roughly speaking. A couple with $200,000 of income loses the first $1,000 of gifts.
Top-bracket itemizers face a new limit. Starting in 2026, filers in the 37% bracket get a slightly reduced benefit from their itemized deductions.
The mortgage limit is now permanent. Interest is still deductible on up to $750,000 of home debt for loans taken out after December 15, 2017. Older loans keep the $1 million limit.
An example
Consider a married couple filing jointly in 2026 with $250,000 of adjusted gross income. They pay $12,000 in state income tax and $9,000 in property tax. They pay $14,000 of mortgage interest and give $5,000 to charity.
Itemized deduction | Under the old $10,000 cap | Under the 2026 rules |
State and local taxes ($21,000 paid) | $10,000 | $21,000 |
Mortgage interest | $14,000 | $14,000 |
Charitable gifts ($5,000, less the 0.5% floor of $1,250) | $3,750 | $3,750 |
Total itemized | $27,750 | $38,750 |
Standard deduction (2026) | $32,200 | $32,200 |
Better choice | Standard deduction | Itemize, by $6,550 |
The only difference is the state and local tax cap. Under the old cap, this couple would take the standard deduction. Under the new rules, itemizing lowers their taxable income by an extra $6,550. In the 24% bracket, that saves about $1,570 in federal tax.
Ways to get more from itemizing
Bunch charitable gifts. If you're close to the line, give two years' worth of donations in one year and itemize that year. Take the standard deduction the next year. A donor-advised fund lets you make the large gift in one year and send grants to charities over time.
Re-run the comparison every year. A new mortgage, a big medical year, a move to a higher-tax state, or the new state and local tax cap can each change the answer.
What this means for you • If you stopped itemizing in 2018, check again for 2025 and 2026. The higher state and local tax cap may change your answer, especially if you own a home in a high-tax state. • If your income is above $500,000, the higher cap shrinks for you. By about $600,000 of income, it is back to $10,000. • If you take the standard deduction, keep receipts for cash gifts to charity. Starting in 2026, up to $1,000 ($2,000 joint) is deductible anyway. • If you're close to the line, bunching charitable gifts into one year can turn a wash into a real deduction. |
The bottom line
Fewer than 1 in 10 filers itemize today, and for most of them, the standard deduction really is the better deal. But the rules for 2025 and 2026 reopened the question for homeowners with high state and local taxes, generous givers, and high earners near the income limits. The only way to know is to run both numbers. It takes a few minutes, and the difference can be thousands of dollars.
This article provides general information only and is not tax advice. Tax rules depend on your specific facts. For advice on your situation, please book a consultation with QM Accounting.
Sources
IRS Publication 1304, Individual Income Tax Returns 2022 (Table A)
IRS Publication 1304, Individual Income Tax Returns 2017 (Table A)
Rev. Proc. 2025-32, Internal Revenue Bulletin 2025-45 (2026 inflation adjustments)
Internal Revenue Code sections 63, 68, 163(h), 164(b), and 170(b) and (p), as amended by Public Law 119-21