Deciding whether to itemize your deductions on your 2024 tax return comes down to balancing potential tax savings against the extra effort required—are your receipts worth the hassle? Let’s dive into the details.

Itemizing vs. Standard Deduction

What is the standard deduction?

The standard deduction is a dollar amount that reduces the amount of income on which you are taxed and varies according to your tax filing status. For the 2024 tax season, the standard deduction is $29,200 for married taxpayers filing jointly and $14,600 for single taxpayers and married taxpayers filing separately. For many taxpayers that we work with, the standard deduction yields a better result than itemizing.

What does it mean to itemize?

Itemizing means listing out each deduction you qualify for, the sum of which is used to lower your adjusted gross income.

What changed under the Tax Cuts and Jobs Act (TCJA)?

December 2017’s tax overhaul, the TCJA, significantly revamped the tax code, including lowering individual tax rates, increasing the standard deduction, and reducing the threshold for medical expense deductions.

For instance, the standard deduction for single filers and married individuals filing separately rose from $6,350 in 2017 to $14,600 in 2024. For married couples filing jointly, it increased from $12,700 in 2017 to $29,200 in 2024, and for heads of households, it grew from $9,350 in 2017 to $21,900 in 2024.

The TCJA also placed a $10,000 cap on the deduction for state and local taxes (which includes income, real estate and personal property taxes). This meant that no matter how much you paid in state and local taxes during the year, your deduction is limited to $10,000. This greatly reduced the number of taxpayers whose total deductions exceed the increased standard deduction amounts.

For example, a married filing joint filer that paid $15,000 in real estate taxes, had state income tax withholdings of $12,500, mortgage interest expense of $10,000 and charitable contributions of $2,500 will not benefit from itemizing their deductions in 2024 because their total deductions of $22,500 (factoring in the $10,000 cap on state and local taxes that reduces their deductible state and local taxes from $27,500 to $10,000) does not exceed the 2024 standard deduction amount of $29,200.

What should you do on your 2024 tax return?

Itemizing could be worth it for the 2024 tax year, but it requires extra effort. It’s wise to add up all the expenses you plan to itemize and then compare the total to the standard deduction amounts for this filing season. Itemizing might be more advantageous if they exceed the standard deduction. Itemizing requires you to keep receipts throughout the year and store them after filing in case of an IRS audit, which can be daunting.