Standard vs. Itemized Deduction: Which Saves You More?
Last April, a friend texted me in a panic. She’d been filing her taxes with the standard deduction for four years straight — never questioned it. Then her coworker mentioned itemizing, and she realized she’d probably left over $2,000 on the table in 2023 alone. She had the mortgage interest, the charitable donations, and the state tax payments to back it up. She just never added them together.
Most people pick the standard deduction because it’s the default. And for about 87% of filers, it’s the right call. But if you’re in the other 13%, you’re giving the IRS money you don’t owe.
The Standard Deduction: The No-Paperwork Option
The standard deduction is a flat dollar amount the IRS lets you subtract from your income before calculating your tax. No receipts. No math. You just claim it.
For the 2024 tax year (filed in 2025), here’s what it looks like:
- Single: $14,600
- Married filing jointly: $29,200
- Head of household: $21,900
- Married filing separately: $14,600
If you’re 65 or older, or blind, you get an extra $1,550 (single) or $1,300 (married).
The standard deduction has gone up significantly over the past decade. Back in 2017, a single filer’s standard deduction was just $6,350. The Tax Cuts and Jobs Act nearly doubled it, which is why far fewer people itemize now than they did before 2018.
That’s the whole pitch: it’s simple. You don’t track anything. You don’t save anything. You just take the number and move on.
Itemized Deductions: The Receipt-Keeping Route
Itemizing means listing out your actual deductible expenses on Schedule A of your 1040. If those expenses add up to more than the standard deduction, you save money. If they don’t, you wasted your time.
The big categories:
Medical and dental expenses — but only the portion exceeding 7.5% of your adjusted gross income (AGI). If your AGI is $60,000, you’d need more than $4,500 in medical costs before any of it counts. A $5,000 medical bill would give you a $500 deduction.
State and local taxes (SALT) — income tax, sales tax, and property tax combined, capped at $10,000. If you live in a high-tax state like California or New York, you’ll hit that cap fast.
Mortgage interest — on loans up to $750,000. On a $400,000 mortgage at 7%, you’d pay roughly $27,800 in interest the first year. That alone nearly doubles the single standard deduction.
Charitable contributions — cash donations up to 60% of your AGI. Non-cash donations (clothes, furniture) count too, at fair market value. A $50 bag of clothes to Goodwill won’t move the needle, but $5,000 in donations to your alma mater will.
Casualty and theft losses — only from federally declared disasters. This doesn’t apply to most people in most years.
How to Decide: A 10-Minute Exercise
Here’s a practical approach. Grab your records and add up the following from the past year:
- State income tax or sales tax paid (check your last pay stub or state return)
- Property tax paid (on your mortgage statement or county website)
- Mortgage interest paid (Form 1098 from your lender)
- Charitable donations (bank statements, donation receipts)
- Medical expenses above the 7.5% AGI threshold
Compare your total to the standard deduction for your filing status. If itemizing wins by more than a few hundred dollars, it’s worth the effort.
Example scenario: Sarah, 28, single, renting in Texas (no state income tax). She donated $800 to charity and had $1,200 in medical expenses on a $50,000 AGI. Her medical deduction threshold is $3,750 — so she gets $0 from medical. Her total itemized deductions: $800. The standard deduction of $14,600 wins by a mile. Sarah should take the standard deduction.
Different scenario: Marcus, 32, married, owns a home in New Jersey. He and his wife paid $9,800 in property taxes, $18,000 in mortgage interest, $4,200 in state income tax, and donated $2,500 to charity. Their SALT deduction is capped at $10,000 (even though their state and property taxes total $14,000). Their itemized total: $10,000 + $18,000 + $2,500 = $30,500. The married standard deduction is $29,200. Itemizing saves them $1,300 in deductions — which, at a 22% marginal rate, puts about $286 back in their pocket.
That $286 might not sound like much. But it adds up over the years, especially as mortgage interest stays high in the early years of a loan.
The States That Complicate Things
Federal rules are one thing. State taxes are another mess.
A handful of states don’t offer a standard deduction at all. If you live in Alabama, Arizona, Arkansas, or Mississippi (among others), you might be required to itemize on your state return even if you take the standard deduction federally.
Massachusetts and Michigan have their own quirks — Massachusetts doesn’t allow a standard deduction, and Michigan’s state income tax has its own deduction structure.
If your state requires itemizing, you’ll need receipts and records for that return regardless of what you do on your federal filing. This means tracking your expenses throughout the year becomes less of a nice-to-have and more of a necessity.
Common Mistakes to Avoid
Forgetting to add it all up. Many people assume they don’t have enough deductions to itemize, but they’ve never actually done the math. Especially if you bought a house mid-year or had a medical event, the numbers might surprise you.
Missing deductible expenses. Charitable donations aren’t just the big checks. Did you donate furniture during a move? Drop off bags of clothes? Buy supplies for a volunteer event? Those count, and they add up.
Not keeping records. If you get audited, “I think I donated about $1,000” won’t hold up. The IRS wants receipts, bank statements, or written acknowledgment from the charity for any single donation over $250.
Itemizing when you shouldn’t. If your itemized total is only $100 more than the standard deduction, think about whether the extra recordkeeping and audit risk is worth it. Sometimes the simpler path is the smarter one.
How Receiptix Fits In
If you’re going to itemize — or even if you just want to know whether you should — you need a year’s worth of expense data. That’s where Receiptix comes in.
Receiptix’s AI receipt scanning lets you capture receipts as you go, so come tax time you’re not digging through shoeboxes. The app categorizes expenses automatically, which means your charitable donations, medical costs, and other deductible spending are already sorted. When you need the numbers, you can generate PDF summaries or export your data to hand off to a tax preparer.
None of this replaces a tax professional’s advice. But it does replace the frantic January scramble through a year’s worth of bank statements.
Tax deductions aren’t complicated — they just require knowing your numbers. Take 10 minutes, do the math, and pick the option that works. And if you decide itemizing is your move, Receiptix can handle the receipt side of the equation year-round so you’re not starting from scratch every spring.
Note: This blog post is for informational purposes only and does not constitute financial advice. Always consult with a financial advisor for personalized guidance.
