Standard Deduction vs. Itemized Deduction: Which Is Better for Your Taxes?

Both the standard deduction and itemized deductions reduce the amount of tax you pay in a given year. So which is better? Should you itemize or should you keep things simple and take the standard deduction? We explain when each option makes sense.

It’s important to note that good tax software will help make the decision for you — by automatically choosing the deduction that gives you the best savings.

For most Americans, the answer is the standard deduction. Nearly 90% of taxpayers claim the standard deduction simply because it’s the best option.

If you don’t know what tax software to use, check out our list of the best tax software to get started.

What is the standard deduction?

The standard deduction is a way to reduce taxable income in a given year. For example, a single person who earned $50,000 in 2025 receives a standard deduction of $15,750. This means that this person would pay taxes on $34,250 ($50,000 minus $15,750).

No matter how much or little you earn in a given year, you can claim the standard deduction.

Note:The OBBBA retroactively increased the standard deduction for 2025 and 2026.

The standard deduction is the standard for a reason. Most people won’t find expenses worth more than $15,750 that they can itemize. The few people who can detail are usually people who donate generously to charity and live in counties with high property or income taxes.

What does tax breakdown mean?

Itemizing your taxes means that you use valid personal expenses to claim a deduction greater than the standard deduction. When you claim a larger deduction, you pay less in taxes, so it’s best to itemize your taxes when you can.

However, only certain expenses can be itemized. The most common expenses people itemize include:

• Charitable contributions
• Mortgage interest (on up to $750,000 of mortgage)
• State and local income taxes or sales tax
• Real estate taxes
• Medical expenses (worth more than 10% of your income)

When these types of expenses add up to more than the standard deduction, it makes sense to itemize your tax return.

If you don’t know if you have more items than your standard deduction, your tax software selection will ask you to enter all of your information, then show you the difference.

Tax reduction without detail

Itemization isn’t the only way to reduce your tax bill. There are plenty of legal ways to reduce your taxable income. We have a complete list of the best tax breaks out there right now.

For example, if you contribute money to a workplace retirement plan — such as a 401(k) — or a traditional IRA, you can deduct the contribution from your gross income. This means that a person who earned $50,000 and contributed $5,000 to a 401(k) would pay taxes on $29,250 ($50,000 minus the standard deduction of $15,750 minus the retirement contribution deduction of $5,000).

This is just one example of many. In addition to retirement savings, you can deduct legitimate business expenses on your Schedule C (such as driving expenses, materials, equipment, and more for your side gigs). Contributing to a health savings account is a great way to save on medical expenses and avoid taxes.

Other deductions you can claim without itemizing include teacher expenses (for classroom supplies), student loan interest, and alimony you paid.

These deductions are called “above the line” deductions and are a great way to reduce your tax bill. “Above the line” deductions can be combined with your standard deduction, so it makes sense to load up on above-the-line deductions (where you legally can, of course).

Strategic planning for “loading” when detailing

With the new, larger standard deductions, determining the years needed to itemize can be a challenge. But you may find it useful to detail some years but not others. If this is your case, some strategic financial decisions can help you maximize the benefit of your breakdown in certain years.

For example, if you buy a home and pay $3,000 in points (prepaid interest), plus $2,000 in mortgage interest, plus $2,000 in property tax, and $8,000 in state income tax, it may make sense to itemize.

But you can enhance this tax advantage by doubling down on charitable contributions. For example, if you donate $5,000 annually, consider donating $10,000 the year you buy the home (perhaps donating at the beginning and end of the year – to make up for the previous or future year lost). That gives you an extra $5,000 for detailing. Then the following year, you can roll back to the standard deduction if that makes sense.

Timing big expenses (such as buying a home, major surgery, or other expenses) with big giving opportunities can help you make the most of itemizing in years when it makes sense.

Final thoughts

It can be difficult to know at first glance whether it makes sense to take the standard deduction or itemize. However, tax software makes this decision easy and automatic.

But each tax software package will help you figure out what’s right for you by asking you a series of questions. If you don’t know which software is right for you, check out our guide to the best tax software.