When Itemizing Deductions on Schedule A Beats the Standard Deduction in 2025

Taxpayers filing 2024 federal income tax returns in early 2025 face a familiar choice with very real bottom-line effects: claim the larger of the standard deduction or itemized deductions on Schedule A. For most households, the decision turns on simple math—whichever deduction is bigger reduces taxable income more—but the policy backdrop explains why millions either stick with the standard deduction or take the time to itemize.

Key figures for 2025 filings

• Standard deduction amounts
  • $14,600 — Single or Married Filing Separately
  • $21,900 — Head of Household
  • $29,200 — Married Filing Jointly
  • Slightly higher amounts apply for taxpayers aged 65 or older or who are blind.

• Itemized deductions still allowed on Schedule A
  • Medical and dental expenses (subject to a 7.5% of adjusted gross income threshold)
  • Certain taxes paid (state and local taxes, subject to the $10,000 SALT cap)
  • Home mortgage interest
  • Charitable gifts
  • Casualty and theft losses from federally declared disasters
  • Several “other” deductions not tied to the suspended 2% floor
• Two TCJA rules that shape itemizing through the 2025 tax year:
  1. SALT deduction cap of $10,000
  2. Suspension of miscellaneous itemized deductions that were subject to the 2% AGI floor

Who itemizes vs. who takes the standard deduction

• The break-even point usually depends on three drivers:
  1. Mortgage interest
  2. Deductible taxes up to the SALT cap
  3. Large medical or charitable totals
• Examples:
  • A teacher with modest mortgage interest and small charity gifts may prefer the standard deduction.
  • A retiree with major out-of-pocket medical bills could see itemized deductions exceed the standard deduction once the 7.5% AGI threshold is applied.
  • An engineer in a high-tax state may find the $10,000 SALT cap limits the benefit of itemizing even with mortgage interest.

Married filing separately rule

If one spouse itemizes, the other spouse cannot claim the standard deduction. Both must itemize.

Practical tip: couples who split expenses should allocate joint costs based on who actually paid or under local property/income rules, and each spouse claims only their share on Schedule A.

TCJA provisions affecting itemizing

• Pease limitation (the previous reduction of itemized deductions for high-income taxpayers) remains repealed through 2025.
• Miscellaneous itemized deductions (previously subject to the 2% AGI floor) remain suspended. This removes deductions such as:
  • Unreimbursed employee expenses (mileage, work-related costs)
  • Certain tax preparation fees
  • Investment management fees and many legal costs

These suspensions significantly reduced the incentive to itemize for many taxpayers who previously relied on those categories.

What counts on Schedule A — details

• Medical and dental: deductible only to the extent they exceed 7.5% of AGI.
  • Example: $10,000 out-of-pocket costs with $100,000 AGI → deductible portion = $2,500.
  • Includes transportation for medical care (mileage), health insurance premiums paid with after-tax dollars (subject to limits), and long-term care insurance (age-based limits). Cosmetic procedures for purely aesthetic reasons generally do not qualify. Insulin qualifies even if over-the-counter.
• Taxes paid (SALT): state and local income or sales taxes, real estate and personal property taxes — capped at $10,000 for most filers.
  • You may choose to deduct income taxes or general sales taxes, but not both.
• Mortgage interest: deductible on acquisition debt for primary and qualified second homes, subject to limits based on when debt was incurred. Points and certain refinancing interest may be deductible (timing depends on circumstances). Home equity loan interest is deductible only if used to buy/build/substantially improve the home securing the loan.
• Charitable gifts: cash and non-cash gifts to qualified organizations, subject to percentage-of-income limits (cash gifts can often be deducted up to 60% of AGI). Non-cash donations require reasonable valuations and records.
• Casualty and theft losses: deductible only if tied to a federally declared disaster for personal-use property; complex reduction rules (insurance recovery, $100 per event, then further reduce by 10% of AGI).
• Other itemized deductions (limited set not subject to the 2% floor):
  • Amortizable bond premium on taxable bonds
  • Casualty/theft losses from income-producing property
  • Federal estate tax on income in respect of a decedent
  • Gambling losses up to gambling winnings
  • Impairment-related work expenses for people with disabilities
  • Losses from Ponzi-type schemes
  • Claim-of-right repayments over $3,000
  • Unrecovered investment in an annuity

These “other” items are narrower but can be decisive in certain years (e.g., gamblers who keep records often must itemize to offset winnings).

Practical steps to decide

1. Gather documentation: receipts, mortgage statements (Form 1098), property tax bills, EOBs, pharmacy records, charity acknowledgment letters.
2. Add likely itemized deductions.
3. Compare the total to the standard deduction for your filing status.
4. If itemized deductions are larger → file Schedule A. If not → take the standard deduction and save time.

Tip: run both scenarios in tax software or with a professional—especially if you have year-to-year fluctuations (major medical event, big charitable gift, disaster loss, mortgage payoff/refinance).

Documentation and audit readiness

• The IRS expects proof. Keep:
  • Canceled checks, bank/credit card statements, invoices
  • Pharmacy printouts and medical receipts showing who received care, who paid, amounts, dates
  • Charity acknowledgments (required for gifts of $250+)
  • Qualified appraisals for large property donations where required
  • Mortgage lender statements (Form 1098)
  • Insurance and repair estimates for casualty losses

Warning: Skipping paperwork can erase a deduction even when the expense was legitimate.

Common confusion points

• Taxes paid vs. taxes owed: the deduction is based on what you paid during the year, subject to the SALT cap. Prepaying property taxes may not help if you already hit the $10,000 cap.
• Mortgage interest: refinancing, cash-out use, and points all have specific rules that affect deductibility.
• Gambling wins/losses: losses are deductible only to the extent of winnings and only if you itemize.

Timing and special tactics

• Medical costs are deducted in the year paid, not when incurred.
• Property taxes follow payment dates.
• Charitable contributions post on the date of delivery (check mailed, card charged, or property transferred).
• Bunching: stacking charitable gifts or elective deductible expenses into one year can push itemized deductions above the standard deduction that year. Donor-advised funds are a common tool for bunching charitable deductions.

Case studies

• Married filing jointly with $29,200 standard deduction:
  • Mortgage interest $9,500 + taxable state/property taxes $12,000 (capped to $10,000) + charitable gifts $4,000 = itemized total $23,500 → take standard deduction.
  • If same couple had $20,000 qualifying medical expenses with $150,000 AGI, medical deduction = $20,000 − 7.5%×$150,000 = $8,750 → itemized total $32,250 → itemize.
• Single filer with $5,000 gambling winnings and $6,000 gambling losses:
  • If standard deduction taken → $5,000 winnings fully taxable.
  • If itemize → can deduct $5,000 of losses to offset winnings (must be documented).

Disaster-related considerations

• Casualty loss rules are complex and often apply only to federally declared disasters for personal-use property.
• The IRS allows an election in some cases to claim a disaster loss on the prior year’s return to speed refunds—this decision affects both years and should be evaluated with a tax professional.

Interaction with other tax items

• Itemizing does not change self-employment tax or certain credits (e.g., Child Tax Credit) directly, but lower taxable income or AGI from larger deductions can affect phase-ins and phase-outs.
• In rare cases, itemizing to claim gambling losses may merely prevent double taxation rather than produce a net tax reduction.

Policy outlook and takeaways

• For 2024 returns filed in 2025:
  • Standard deduction remains at the amounts stated (inflation-adjusted).
  • SALT cap remains $10,000.
  • Pease phase-out remains repealed through 2025.
  • Suspension of miscellaneous itemized deductions subject to the 2% floor remains in place.

The bottom line: run the math each year. If itemized deductions—medical and dental costs above 7.5% of AGI, taxes paid up to the SALT cap, home mortgage interest, charitable gifts, casualty/theft losses from federally declared disasters, and qualifying “other” deductions—add up to more than your standard deduction, itemize on Schedule A. If not, take the standard deduction.

For official instructions and worksheets, review the IRS page for Schedule A (Form 1040) for definitions, examples, and documentation guidance: IRS Schedule A (Form 1040) page.

Final practical advice: gather documents early, compare both outcomes in software or with a preparer, and remember that timing (payments, year-end actions, bunching strategies) can change which option is best from year to year.