Standard Deduction 2026: New Amounts and When to Itemize

The standard deduction is a fixed amount that reduces your adjusted gross income before calculating your income tax. For 2026, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household. These amounts represent increases from 2025 due to inflation adjustments mandated by the Internal Revenue Code. Additionally, taxpayers age 65 and older are entitled to an additional standard deduction of $2,050 (single) or $1,650 (married), stacked on top of the base standard deduction. So a single filer age 65+ has a standard deduction of $18,150, and a married couple age 65+ has a combined standard deduction of $33,850. The One Big Beautiful Bill Act introduced yet another layer: a new $6,000 deduction for taxpayers age 65 and older (indexed for inflation), separate from and stacked with the prior two standard deduction amounts. This $6,000 deduction phases out at 6% per $1,000 of MAGI above $75,000 (single) or $150,000 (joint), completely eliminating at $175,000 (single) or $250,000 (joint). For a single senior age 65+ with $75,000 MAGI, the combined standard deduction is $16,100 + $2,050 + $6,000 = $24,150, effectively allowing $24,150 of income to be tax-free before reaching tax brackets.

Deciding whether to claim the standard deduction or itemize depends on comparing your total itemized deductions against your standard deduction. If your itemized deductions exceed your standard deduction threshold, itemizing produces a larger deduction and lower tax. If itemized deductions fall short, the standard deduction is preferable. Common itemized deductions include mortgage interest, property taxes and state income taxes (limited by the SALT cap to $40,400 in 2026, IRC §164(b)(6)), charitable contributions, and medical expenses exceeding 7.5% of AGI (IRC §213). The standard deduction exceeds total itemized deductions for the majority of filers; approximately 10-15% of filers itemize (based on IRS Statistics of Income data). Homeowners with mortgages exceeding $200,000, those with property taxes over $10,000 annually, or those making charitable gifts over $5,000 annually may find itemizing worthwhile. One approach called 'bunching' involves timing: if you're near the itemizing threshold, you might accelerate charitable contributions into a single year (donating property in December and January contributions in the same calendar year) to exceed the standard deduction threshold that year, then claim the standard deduction in the next year. This approach can produce two years of tax benefit rather than spreading deductions too thinly to exceed the threshold in either year.

The SALT deduction cap interacts with itemizing thresholds to affect planning. The SALT cap limits deductions for combined state income tax, local property tax, and sales tax to $40,400 in 2026 (IRC §164(b)(6)(B)). The cap is temporary—it sunsets to $10,000 per tax return after 2029 (IRC §164(b)(6)(H)). For taxpayers in states with combined state and local taxes exceeding $40,400, the SALT cap reduces itemized deductions below the standard deduction level, making itemization less attractive. These taxpayers may consider the Pass-Through Entity Tax (PTET) election to pay state tax at the entity level and claim federal deductions outside the SALT cap. Charitable giving strategies become relevant: donating appreciated securities to charity avoids capital gains tax (IRC §170(e)) and provides an itemization deduction. For retirees with income from retirement accounts and investment accounts, timing distributions and income recognition affects overall itemization. The 2029 sunset (SALT cap reverting to $10,000) creates a planning consideration for 2026-2028: some households may evaluate income timing or deduction acceleration before the lower cap takes effect.