Tax Deduction Calculator: Compare Standard vs. Itemized Deductions

You can deduct medical expenses that exceed 7.5% of your Adjusted Gross Income (AGI). For example, if your AGI is $75,000, you can only deduct medical expenses above $5,625. This includes doctor visits, prescriptions, hospital stays, medical devices, and even travel for medical care.

The SALT deduction includes state income taxes or sales taxes, local property taxes, and other state and local taxes. However, since 2018, the SALT deduction has been capped at $10,000 per household ($5,000 if married filing separately). This cap significantly limits the benefit for high-income earners in high-tax states.

Interest paid on your primary residence and one second home is generally deductible. For mortgages taken out after December 15, 2017, you can deduct interest on up to $750,000 of mortgage debt ($375,000 if married filing separately). Older mortgages may qualify for the previous $1 million limit.

This deduction often makes itemizing worthwhile for homeowners, especially in the early years of a mortgage when interest payments are highest. It's a key factor in the rent vs. buy decision for many households.

Cash donations to qualified charitable organizations are deductible up to 60% of your AGI. Donations of property, stocks, or other assets have different limits. You must have proper documentation for all charitable deductions—cancelled checks, bank statements, or acknowledgments from the charity.

The CARES Act temporarily allowed above-the-line deductions for charitable giving (up to $300 for individuals, $600 for married couples) even when taking the standard deduction, but this provision has expired for 2025 tax returns.

Scenario 1: Young Professional (Take Standard Deduction)

Scenario 2: Homeowners with Mortgage (Itemize Deductions)

Scenario 3: Senior with High Medical Costs

Should I prepay my property taxes or mortgage interest to increase deductions?

This strategy, known as "deduction bunching," can work if you're close to the itemizing threshold. Paying your January mortgage payment in December or prepaying estimated property taxes can shift deductions into the current year. However, be aware of the SALT cap for property tax prepayments and the Alternative Minimum Tax (AMT) considerations.

The strategy is most effective if you're slightly below the standard deduction threshold and can time significant expenses to push you over in alternating years. Always consult with a tax professional before implementing bunching strategies.

Can I deduct home office expenses as an employee?

Unfortunately, the Tax Cuts and Jobs Act eliminated the home office deduction for employees through 2025. You can only claim home office deductions if you're self-employed or an independent contractor. If Congress doesn't extend the provision, employees may be able to deduct home office expenses again starting in 2026.

Self-employed individuals can still deduct home office expenses using Form 8829, subject to specific requirements about exclusive and regular use of the space for business purposes.

How do I handle deductions if I'm married filing separately?

When married filing separately, both spouses must use the same deduction method—either both itemize or both take the standard deduction. If one spouse itemizes, the other spouse cannot take the standard deduction, even if it would be more beneficial. This rule prevents couples from splitting deductions strategically.

Additionally, when filing separately, many deduction limits are cut in half: the SALT cap becomes $5,000 instead of $10,000, and phase-out ranges for various deductions are lower. Carefully run the numbers both ways to see if filing jointly or separately saves more money overall.

What if I claimed the wrong deduction method in previous years?

If you discover you would have benefited from itemizing in a previous year, you can file an amended return using Form 1040-X within three years of the original filing date or two years from when you paid the tax, whichever is later. You must amend your federal return if you amend your state return for consistency.

If you itemized when you should have taken the standard deduction, you generally don't need to amend your return—you simply paid more tax than necessary. However, if you discover additional itemized deductions, you might benefit from amending.