Itemize vs Standard Deduction Real Benefit Calculator
Example: Mortgage interest paid: 14000 $ · Property taxes paid: 6000 $ · State income taxes paid (or sales tax if higher): 5000 $ · Charitable contributions: 2000 $ · Other itemized deductions (casualty loss, etc.): 0 $ · Filing status (0 = Single, 1 = Married Filing Jointly): 0 · Gross annual income: 120000 $
| Tax saved by itemizing vs standard deduction | $2,398 |
| 2026 standard deduction | $16,100 |
| Your itemized total (SALT capped at $40,400 for 2026) | $27,000 |
| Excess over standard deduction | $10,900 |
Worked example
A single filer on $120,000 with $14,000 mortgage interest, $6,000 property tax, $5,000 state income tax, and $2,000 in charitable gifts: property tax + state income tax = $11,000, comfortably below the 2026 SALT cap of $40,400, so all $11,000 is deductible — under the old $10,000 cap $1,000 of it would have been lost. Total itemized: $14,000 + $11,000 + $2,000 = $27,000. The 2026 standard deduction is $16,100. Excess over standard: $10,900. At a 22% marginal rate, itemizing saves about $2,398 in federal tax — real savings, but far less than the $27,000 headline figure suggests, because the first $16,100 of it was free anyway.
Frequently asked questions
What is the SALT cap now, and does it apply to MFJ filers too?
The cap is $40,400 for 2026 — the One Big Beautiful Bill Act (P.L. 119-21) raised it from the TCJA's flat $10,000 to $40,000 for 2025 and $40,400 for 2026. It still does not double for married filing jointly, which is why high-tax-state dual-income couples remain disproportionately affected. Two conditions to know: the cap phases down by 30 cents per dollar of modified AGI above $505,000, though never below a $10,000 floor; and it is scheduled to revert to $10,000 after 2029.
What mortgage interest is deductible?
You can deduct interest on up to $750,000 of mortgage debt (loans after December 15, 2017). Older mortgages may qualify for the $1,000,000 cap. Interest on a second home counts if the total debt across both homes stays within limits. Home equity loan interest is deductible only if the loan was used to buy, build, or substantially improve the home.
What about the Alternative Minimum Tax (AMT)?
If you are subject to AMT, many itemized deductions — especially SALT — are added back. High-income filers who itemize primarily on SALT should run an AMT calculation before assuming their itemized deductions reduce tax dollar-for-dollar.