Glossary · Tax filing
Itemized deductions
Itemized deductions are the expenses you list one by one on Schedule A, instead of taking the standard deduction.
Updated · Sources
Limits on three itemized deductions, 2026
- $40,400
- is the cap on the state and local taxes you can deduct.
- $750,000
- of mortgage debt on your main and second home is the limit for deducting its interest.
- 7.5%
- of your AGI comes off your medical costs, and only the rest counts.
Married people filing separately get half of the first two: $20,200 and $375,000.
Itemizing is a choice you make on each year’s return. It usually pays when your itemized total is larger than your standard deduction. Itemizing gives up the separate charitable deduction for non-itemizers, so add it to the standard deduction when you compare.
The state and local tax (SALT) cap covers your income or sales taxes plus property taxes. Property taxes on a business or rental property are not capped. At high incomes the cap shrinks, based on your modified AGI.
Mortgage debt taken on by December 15, 2017 keeps the older $1 million limit. Interest on a home equity loan counts only if the loan bought, built or improved the home. These mortgage rules are now permanent, and so is the ban on miscellaneous itemized deductions. That ban keeps tax preparation and investment fees nondeductible as itemized deductions.
Two new limits start in 2026. Only the part of your charitable gifts above 0.5% of your AGI counts. If you are in the 37% bracket, each dollar of itemized deductions saves at most 35 cents.
Sources
- 26 U.S.C. § 63, Taxable income defined
- 26 U.S.C. § 164, Taxes (the SALT cap)
- Public Law 119-21 (One Big Beautiful Bill Act)
- IRS, Instructions for Schedule A (Form 1040) (2025)
Reviewed and updated September 2026. General information, not advice for your situation.