Itemized deduction.

In plain English

An itemized deduction is a specific allowable expense listed on Schedule A of Form 1040 to reduce taxable income. The major categories are: state and local taxes (SALT, capped at $40,400 for 2026 under current law, up from the $10,000 cap the 2017 TCJA set), home mortgage interest (on up to $750,000 of principal for mortgages after Dec 2017), charitable contributions to qualified organizations, and unreimbursed medical expenses above 7.5% of AGI. Taxpayers choose the higher of the standard deduction or the sum of itemized deductions; only one applies.

01Why it matters

Since the 2017 TCJA raised the standard deduction and capped SALT at $10,000, itemizing makes sense for fewer households than it used to. Most filers now take the standard ($16,100 single / $32,200 MFJ in 2026). Itemizing typically helps homeowners with a large mortgage in high-tax states, taxpayers in a year of large charitable giving, or those with significant medical bills.

02The math, step by step

A single homeowner in New Jersey has: $8,000 in state and local taxes (under the $40,400 SALT cap), $14,000 in mortgage interest, and $3,000 in charitable gifts. Total itemized: $25,000. That exceeds the 2026 single standard deduction of $16,100, so itemizing reduces taxable income by about $8,900 more than the standard, which at a 24% marginal rate is about $2,140 in additional federal tax savings.

03What this is NOT

04Receipts

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