Personal Finance & Estate › Income, gift, estate & real-estate taxes › Income tax (federal & California)
Standard vs. itemized deductions (incl. mortgage interest)
$32,200 joint standard (2026)· Tax rule
Law or rule (2026)Set by statute, regulation or the agency; numbers change yearly.
Each year you subtract either a flat standard deduction ($32,200 joint in 2026) or your itemized total, whichever is larger.
See it on the Personal Finance & Estate map →How it works
The 2026 standard deduction is $16,100 single or $32,200 joint, plus extra at 65+, and the 2025 law adds a $6,000 senior deduction through 2028. Itemizing totals state and local taxes (see SALT cap), mortgage interest on up to $750,000 of home debt, charity, and medical costs over 7.5% of income. California is separate: a small standard deduction (about $11,000 joint) and interest allowed on up to $1 million of mortgage. Rental-property interest and taxes go on Schedule E instead, uncapped.
Why it matters for you
Most households now take the standard deduction; itemizing pays mainly with big mortgages, high state taxes or large gifts, which can be 'bunched' into alternate years.
Think of it like
Like choosing between a flat management fee and billing actual expenses: take whichever is larger.
Rules, limits and sources (2026)
IRS Rev. Proc. 2025-32 set 2026 amounts; the 2025 law made the $750,000 mortgage cap permanent; IRS data show about 9 in 10 filers took the standard deduction after 2018.
Watch out for
New 2026 limits, a 0.5%-of-income floor on charity and a 35% value cap for top-bracket itemizers, may change giving; their effect is unknown.
Connections (3)
▸Standard vs. itemized deductions (incl. mortgage interest) shrink the base of Income tax (federal & California)Law or rule (2026)
How they connect
Deductions are subtracted from AGI to reach taxable income, the amount the brackets apply to. Every filer either takes the standard deduction or itemizes, whichever is larger. In the 24% bracket, $10,000 more of deductions saves $2,400 federally, but only if itemizing beats the $32,200 joint standard amount.
When it applies
The standard deduction began in 1944; the 2017 law nearly doubled it, and the 2025 law made that permanent.
The rule
IRC Secs. 63 and 67; Form 1040 and Schedule A show the choice; IRS data show itemizers fell from about 30% to roughly 10% after 2018.
Watch out for
Whether the SALT cap drops back to $10,000 in 2030 as scheduled, and how that shifts itemizing, is unsettled.
▸SALT deduction cap (raised to $40,000 in 2025) limits Standard vs. itemized deductions (incl. mortgage interest)Law or rule (2026)
How they connect
SALT is often the largest itemized deduction. Capped at $10,000, it pushed most households to the standard deduction; at $40,400 in 2026, more California homeowners again beat the $32,200 joint standard deduction by adding mortgage interest and charity. California's own return has no cap on property-tax deductions.
When it applies
After 2018 the share of federal filers who itemize fell from about 31% to about 11%, according to IRS data.
The rule
IRS Statistics of Income data on itemized deductions; Schedule A instructions.
Watch out for
How many filers return to itemizing under the higher cap will not be clear until 2025 and 2026 return data arrive.
▸Mortgages & real-estate debt earn an interest deduction under Standard vs. itemized deductions (incl. mortgage interest)Law or rule (2026)
How they connect
Home mortgage interest is deductible only if you itemize, on loans up to $750,000 used to buy, build or improve a main or second home ($1 million for loans before mid-December 2017). With the 2026 joint standard deduction at $32,200, many owners get no benefit. Rental property interest is deducted on Schedule E either way.
When it applies
Interest deductions date to the 1913 income tax; the 2017 law cut the cap to $750,000, and the 2025 law made that cap permanent.
The rule
IRC Sec. 163(h) sets the limits; IRS Publication 936 explains them; lenders report interest paid on Form 1098.
Watch out for
Economists largely agree the deduction mostly benefits higher earners and does little for homeownership rates; whether to trim it is debated politically.