Glossary
Itemized deductions
Definition
Itemized deductions are specific expenses, such as mortgage interest, state and local taxes up to a cap and charitable gifts, that taxpayers can deduct instead of the standard deduction. From 2026, charitable deductions face a floor and a cap for top-bracket filers.
How itemized deductions works
State and local taxes are capped ($40,4002026 · Federal law in the 2026 calculator assumptions). Charitable deductions count only above 0.5% of AGI2026 · IRS, and top-bracket filers' benefit is capped at 35%2026 · IRS.
Itemizing makes sense only when the total exceeds the standard deduction.
Why it matters to a firm
The 2026 changes make itemizing decisions more complex, which raises the value of professional help.
| 2026 figure | Source |
|---|---|
| SALT deduction cap used by the 1040 calculator: $40,400 | Federal law (2025 tax law), as applied in the calculator |
| Floor on itemized charitable deductions: 0.5% of AGI | IRS, effective 2026 |
| Benefit cap for 37%-bracket itemizers: capped at 35% | IRS, effective 2026 |
Questions about itemized deductions
What's the SALT cap?
A limit on deductible state and local taxes; the 2026 calculators use $40,4002026 · Federal law.
Are medical expenses deductible?
Above an AGI threshold, if itemizing.
Is mortgage interest deductible?
Within limits, if itemizing.
No question matches that filter. Clear it to see them all, search the whole site, or ask us directly; we reply within one business day.
Related terms: Standard deduction · Adjusted gross income
Next entry
Put the definition next to the number
Calculators on your site explain their own terms, in English or Spanish, before the client ever calls.
Firm and Network plans include a 14-day trial. Cancel before it ends and you pay nothing.