Introduction
When filing your tax return, you must choose between the standard deduction and itemized
deductions to reduce your taxable income. Under IRC § 63, taxpayers can either:
- Â Take the standard deduction, a fixed amount based on filing status
- Â Itemize deductions for medical expenses, mortgage interest, state taxes, and charitable
contributions
This guide explains the differences, when to itemize, and how to choose the best deduction
method for 2025.
2025 Standard Deduction Amounts
| Filing Status | Standard Deduction |
|---|---|
| Single | $14,600 |
| Married Filing Jointly | $29,200 |
| Head of Household | $21,900 |
| Married Filing Separately | $14,600 |
Additional Deduction for Seniors & Blind Taxpayers
- Â Single or Head of Household: Extra $1,950
- Â Married Filing Jointly: Extra $1,550 per spouse
What Are Itemized Deductions?
Instead of taking the standard deduction, taxpayers can itemize deductions on Schedule A (Form
1040), including:
-  Medical Expenses: Above 7.5% of AGI (IRC § 213)
-  State and Local Taxes (SALT): Capped at $10,000 (IRC § 164(b))
-  Mortgage Interest: Up to $750,000 loan balance (IRC § 163(h))
-  Charitable Contributions: Up to 60% of AGI (IRC § 170)
-  Casualty and Theft Losses: Only for federally declared disasters (IRC § 165)
Standard vs. Itemized: How to Choose the Best Option
| Factor | Standard Deduction | Itemized Deductions |
|---|---|---|
| Claim Requirements | Automatic | Must list eligible expenses |
| Who Benefits? | Most taxpayers | Those with high medical, mortgage, or state tax expenses |
| IRS Form | Form 1040, Line 12 | Schedule A (Form 1040) |
When Should You Itemize Deductions?
- Â You own a home and pay mortgage interest.
- Â You have high medical bills exceeding 7.5% of AGI.
- Â You pay high state or local taxes exceeding the standard deduction.
- Â You make large charitable contributions.
How to Claim Standard or Itemized Deductions
Step 1: Determine Your Deduction Amounts
- Â Add up eligible itemized expenses using receipts and tax documents.
- Â Compare the total with the standard deduction amount for your filing status.
Step 2: Report on Form 1040
- Â If taking the standard deduction, enter it on Line 12 of Form 1040.
- Â If itemizing, report deductions on Schedule A (Form 1040).
IRS Forms & Compliance Checklist
- Form 1040 – Report deductions
-  Schedule A (Form 1040) – If itemizing
- Â Receipts for medical, mortgage, or charitable deductions
Conclusion
Choosing between standard and itemized deductions depends on your expenses and financial situation. If your itemized deductions exceed the standard deduction, itemizing may lower your tax bill. Otherwise, taking the standard deduction simplifies filing.
For expert tax guidance, schedule a consultation with Anshul Goyal, CPA EA FCA, a licensed tax
professional and IRS representative.
Frequently Asked Questions (FAQs)
1. Can I switch between standard and itemized deductions each year?
Yes, you can choose the best option each tax year.
2. Can I take both standard and itemized deductions?
No, you must choose one.
3. Do I need receipts for the standard deduction?
No, only for itemized deductions.
4. Can I itemize deductions if I take the standard deduction?
No, but you can choose the best method before filing.
5. What if I am married and my spouse itemizes?
If you file Married Filing Separately, you must both itemize or both take the standard
deduction.
About Our CPA
Anshul Goyal, CPA EA FCA is a licensed Certified Public Accountant and an IRS Enrolled Agent (EA).
He specializes in tax deductions, IRS compliance, and tax-saving strategies.
Schedule a consultation today with Anshul Goyal, CPA, to optimize your tax deductions.