Tax season 2025: Itemize or take the standard deduction?
Tax deductions help keep money in your pocket. When it’s time to file your return, there’s typically two ways to take them – the standard deduction, a single, fixed amount the IRS lets you deduct, or itemized deductions, where you add up qualifying costs with proof of expenses. If those costs add up, itemizing your deductions could net you a bigger tax break.Some expenses you can deduct by itemizing include:Out-of-pocket medical expenses exceeding 7.5% of your gross incomeState and local taxes up to $10,000Interest paid on mortgage debt up to $750,000 to $1 million, depending on your home purchase dateWe asked enrolled agent Phyllis Jo Kubey, a member of the National Association of Enrolled Agents with decades of experience in tax filing, how to know if you should take the standard deduction or itemize deductions. “Basically, you look at the numbers,” she says. “If your itemized deductions are going to exceed the standard deduction you definitely want to itemize.”For tax year 2024, the standard deduction is:$14,600 for single filers$21,900 for heads of household$29,200 for married couples filing jointly or qualifying surviving spousesThe Tax Cuts and Jobs Act of 2017 nearly doubled the standard deduction and eliminated or capped many itemized deductions. The National Consumer Unit reviewed individual income tax returns for tax year 2022, the most recently available IRS data, and found that only about 9% of filers itemized returns.If you choose to itemize, it’s especially important to keep detailed records as the IRS can audit returns within three years, or up to six years if substantial errors are found.
Tax deductions help keep money in your pocket. When it’s time to file your return, there’s typically two ways to take them – the standard deduction, a single, fixed amount the IRS lets you deduct, or itemized deductions, where you add up qualifying costs with proof of expenses. If those costs add up, itemizing your deductions could net you a bigger tax break.Some expenses you can deduct by itemizing include:
- Out-of-pocket medical expenses exceeding 7.5% of your gross income
- State and local taxes up to $10,000
- Interest paid on mortgage debt up to $750,000 to $1 million, depending on your home purchase date
We asked enrolled agent Phyllis Jo Kubey, a member of the National Association of Enrolled Agents with decades of experience in tax filing, how to know if you should take the standard deduction or itemize deductions. “Basically, you look at the numbers,” she says. “If your itemized deductions are going to exceed the standard deduction you definitely want to itemize.”For tax year 2024, the standard deduction is:
- $14,600 for single filers
- $21,900 for heads of household
- $29,200 for married couples filing jointly or qualifying surviving spouses
The Tax Cuts and Jobs Act of 2017 nearly doubled the standard deduction and eliminated or capped many itemized deductions. The National Consumer Unit reviewed individual income tax returns for tax year 2022, the most recently available IRS data, and found that only about 9% of filers itemized returns.If you choose to itemize, it’s especially important to keep detailed records as the IRS can audit returns within three years, or up to six years if substantial errors are found.