Standardized vs. Itemized Deductions: Choosing the Right Method
What This Covers
How to decide whether your client should take the standard deduction or itemize on Schedule A.
Standard Deduction:
A fixed amount set by the IRS based on filing status, adjusted each year for inflation. No receipts or documentation required. Both deduction amounts appear on line 12 of Form 1040.
Filing status | 2024 amount |
|---|---|
Single / Married Filing Separately | $14,600 |
Head of Household | $21,900 |
Married Filing Jointly | $29,200 |
Your client may qualify for an additional $1,550 if they are 65 or older or blind, or $1,950 if they are also unmarried and not a surviving spouse.
Itemized Deductions:
Listed on Schedule A. Requires your client to keep receipts and records for all claimed expenses. Common deductions include:
State and local taxes (SALT): Income, property, and sales taxes, capped at $10,000 ($5,000 if married filing separately).
Mortgage interest: Deductible on home loans up to $750,000 for loans originated after December 15, 2017.
Charitable contributions: Donations to qualified organizations, subject to AGI limits.
Medical expenses: Only the portion exceeding 7.5% of your client's AGI is deductible.
How to Choose:
Use whichever method produces the lower tax liability. Itemize if your client's total qualifying expenses exceed the standard deduction for their filing status.
Some clients cannot use the standard deduction and must itemize:
Married individuals filing separately whose spouse itemizes.
Nonresident aliens.
Most clients benefit from the standard deduction because of its simplicity.