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 | $2,453 |
| 2025 standard deduction | $15,000 |
| Your itemized total (SALT capped at $10,000) | $26,000 |
| Excess over standard deduction | $11,000 |
Worked example
A single filer 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, but the SALT cap limits that to $10,000. Total itemized: $14,000 + $10,000 + $2,000 = $26,000. The 2025 standard deduction is $15,000. Excess over standard: $11,000. At a 22% marginal rate, itemizing saves about $2,420 in federal tax — real savings, but much less than the $28,000 headline figure suggests.
Frequently asked questions
The SALT cap is $10,000 — does that apply to MFJ filers too?
Yes. The SALT cap is $10,000 for both single filers and married filing jointly — it does not double for couples, which is why high-tax-state dual-income couples are disproportionately affected. This is one of the most criticized aspects of the TCJA, and whether it will be extended or modified beyond 2025 is subject to ongoing Congressional debate.
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.