Standard vs Itemised Deduction: How to Decide
Most filers take the standard deduction — but itemising can save thousands if your specific costs add up.
The basic choice
You can subtract either the standard deduction (a flat amount based on filing status) or the total of itemised deductions (specific eligible expenses) from your taxable income. Pick whichever is larger.
Why most people now take the standard
The standard deduction roughly doubled in 2018 and continues to be indexed annually. Around 90% of filers now take the standard because their itemisable expenses fall short of it.
What can be itemised
Mortgage interest, state and local taxes (capped at $10,000), large charitable contributions, and medical expenses over 7.5% of AGI. Plus some less common categories.
Bunching deductions
If you're close to the standard deduction threshold, consider 'bunching' — concentrating charitable donations into one year (e.g. donating two years of giving in December) to exceed the standard, then taking the standard the next year.
Itemise more easily with a DAF
A donor-advised fund lets you contribute (and deduct) a large amount in one year, then distribute to charities over time. Combines well with bunching strategy.
Frequently asked questions
Do I have to choose the same way every year?
No — recompute each year. Bunching specifically takes advantage of switching.
Are state taxes affected?
Some states allow itemising even if you take federal standard. Check your state rules.
What about the QBI deduction?
Separate from standard/itemised — small business and pass-through income often qualifies for an additional 20% deduction.