Standard Deduction vs. Itemizing in 2026 — the $40,400 SALT Cap Test

2025 vs. 2026 at a glance

The One Big Beautiful Bill Act (OBBBA, Public Law 119-21) raised both the standard deduction and the SALT cap. Here's how the two years line up for every filing status:

Source: IRS Rev. Proc. 2024-40 (tax year 2025) and Rev. Proc. 2025-32 (tax year 2026), reflecting the OBBBA-modified §63(c) and §164(b)(6).

The break-even math

There is exactly one question that decides this: does the sum of your allowable Schedule A deductions clear your standard deduction? The formula is:

2026 — itemize if:
  SALT_paid (≤ SALT cap)
+ home_mortgage_interest
+ max(0, charitable_contributions − 0.5% × AGI)   (non-cash gifts absorb the floor first)
+ medical_expenses_above_7.5%_of_AGI
+ other_Schedule_A_items
  >  standard_deduction + min(cash_gifts_to_public_charities, $1,000; $2,000 joint)

2025 — the same test with no 0.5% floor and nothing added to the standard deduction.

Both 2026 charity rules come from OBBBA. Itemizers deduct charitable gifts only to the extent they exceed 0.5% of AGI (IRC §170(b)(1)(I)), and filers who take the standard deduction add up to $1,000 ($2,000 on a joint return) of cash gifts on top of it (IRC §170(p)). Anyone who gives to charity therefore has a slightly higher bar to clear before itemizing pays off.

Four 2026 examples

• MFJ, high-tax state (NY), AGI $200,000. $30,000 in state income + property tax (under the $40,400 cap). Add $12,000 mortgage interest and $4,000 of cash gifts, of which $3,000 counts after the $1,000 floor → total $45,000 vs. the $32,200 joint standard deduction + $2,000 non-itemizer gift deduction = $34,200. Itemize.
• Single renter, low-tax state, AGI $50,000. $6,000 SALT + $1,250 of the $1,500 given ($250 floor) = $7,250 vs. $16,100 standard deduction + $1,000 = $17,100. Take the standard deduction.
• Single, close call, AGI $50,000. $15,600 SALT + $750 of a $1,000 gift = $16,350 vs. $16,100 + $1,000 = $17,100. Take the standard deduction. Without the two 2026 charity rules, the same numbers ($16,600 vs. $16,100) would have pointed the other way.
• HoH homeowner near break-even, AGI $80,000. $11,000 SALT + $9,000 mortgage interest + $2,100 of $2,500 in gifts (after the $400 floor) = $22,100 vs. $24,150 standard deduction + $1,000 = $25,150. Take the standard deduction — you'd need more than $3,050 of additional Schedule A items (or bunch two years of giving into one) to flip.

Three of them one year earlier (2025)

For 2025 there is no 0.5% floor and no non-itemizer gift deduction, so charitable gifts count in full on Schedule A.

• MFJ, high-tax state: $30,000 SALT + $12,000 mortgage + $4,000 charitable = $46,000 vs. $31,500 → itemize.
• Single renter: $6,000 + $1,500 = $7,500 vs. $15,750 → standard.
• HoH homeowner near line: $22,500 vs. $23,625 → standard.

Break-even threshold by filing status (2026)

The simplest way to think about it: itemize once your Schedule A total (with charitable gifts counted only above 0.5% of AGI) exceeds these amounts, plus your cash gifts up to $1,000 ($2,000 on a joint return), which a non-itemizer deducts on top.

Married filing separately: if your spouse itemizes, your standard deduction is $0, so you must itemize too, even if your Schedule A total is under $16,100.

Seniors and the additional standard deduction

The bar to itemize is higher if you're 65+ or blind. Each qualifying condition adds a fixed amount on top of your base standard deduction:

A married couple both age 65 gets $3,300 on top of the $32,200 joint standard deduction — a combined $35,500 to clear before itemizing pays off.

Related tools and guides

Bottom line

For most filers, the OBBBA-raised standard deduction is still the easier and larger deduction. But if you own a home in a high-tax state, the $40,400 2026 SALT cap opens a real five-year window (2025–2029) where itemizing can beat the standard deduction by thousands. Run your numbers through the Itemized Deduction Calculator before you file.