Standard Deduction vs. Itemizing: Which Strategy Offers the Best Tax Break in 2025?
As the 2025 tax season gets underway, taxpayers must decide between taking the standard deduction or itemizing their deductions — a choice that could significantly impact how much they owe or save.
The standard deduction is a flat amount that reduces taxable income, while itemizing allows individuals to deduct specific expenses, such as medical bills, mortgage interest, and state and local taxes. However, itemizing requires documentation and only makes sense if the total deductions exceed the standard deduction threshold.
For the 2024 tax year, the IRS has set the standard deduction amounts at:
- $14,600 for single filers
- $21,900 for heads of household
- $29,200 for married couples filing jointly or qualifying surviving spouses
According to Phyllis Jo Kubey, an enrolled agent and tax expert, the decision should come down to simple math: “If your itemized deductions are going to exceed the standard deduction, you definitely want to itemize.”
Despite the potential benefits, only 9% of taxpayers itemized in 2022, largely due to changes from the 2017 Tax Cuts and Jobs Act, which nearly doubled the standard deduction and limited many itemized deductions.
Common itemizable expenses include:
- Medical costs exceeding 7.5% of adjusted gross income
- State and local taxes (up to $10,000)
- Mortgage interest (on debt up to $750,000 to $1 million, depending on when the home was purchased)
For those choosing to itemize, meticulous record-keeping is crucial. The IRS can audit returns for up to three years, or up to six years if significant errors are found.
Ultimately, taxpayers should review their expenses carefully to determine which deduction method offers the greater financial benefit.
Click here to view original web page by Allie Jasinski on BusinessInsider.com.