Standard Versus Itemized Deductions: Which Will Save You More on Taxes?

When tax season rolls around, many homeowners and buyers face a big question: Should I take the standard deduction or itemize? 

With the potential to save thousands, understanding the difference between standard versus itemized deductions is key to making the most of your return—and your real estate investment.

Let’s break it down so you can make an informed, confident decision.

What are standard versus itemized deductions?

At a high level, a deduction is a portion of your income that the IRS lets you subtract before calculating your tax bill. 

The more deductions you claim, the lower your taxable income—and the less you may owe.

There are two main ways to claim deductions:

1. Standard deduction: A flat-dollar amount based on your filing status
2. Itemized deductions: A detailed list of specific qualifying expenses

Every year, taxpayers can choose the higher of the two.

For example, if your income is $75,000 and you claim a $30,000 standard deduction (as a married couple filing jointly), your taxable income drops to $45,000. 

But if your qualifying itemized deductions total $32,000, itemizing would reduce your taxable income to $43,000, potentially lowering your overall tax liability.

Benefits of the standard deduction

The standard deduction is popular for a reason—nearly 90% of taxpayers use it. 

For tax year 2025, here’s what you can deduct automatically:

• $15,000 for single filers and married individuals filing separately
• $30,000 for married couples filing jointly
• $22,500 for heads of household

Why is the standard deduction so common?

• It’s simple: No need to collect receipts or complete extra forms.
• It’s automatic: You qualify just by filing your taxes.
• It avoids audit headaches: No documentation needed unless you claim additional credits.

If your deductible expenses are low—or you want a fast, stress-free filing—it might be the way to go.

When does itemizing deductions make sense?

While the standard deduction is straightforward, itemizing can unlock bigger savings, especially if you’re a homeowner.

Itemized deductions include:

• Mortgage interest
• Property taxes
• Charitable donations
• Unreimbursed medical expenses (over 7.5% of income)
• State and local taxes (up to $10,000 combined)
• Casualty losses in federally declared disasters
• Gambling losses (up to your winnings)

For example, if you donated $8,000 to charity, paid $6,000 in property taxes, and another $5,000 in mortgage interest, that’s $19,000 in itemized deductions—more than the $15,000 standard deduction for a single filer. 

In this case, itemizing would save you more.

Homeowners: Pay attention to these key deductions

Owning a home often tips the scale toward itemizing. 

Here’s why:

• Mortgage interest: Especially high in the early years of your loan, this can be one of your biggest deductions.
• Property taxes: Combine this with your mortgage interest and other deductions—like charitable contributions—and you may easily exceed the standard threshold.

You can find your mortgage interest and real estate tax totals on IRS Form 1098 from your lender.

Standard versus itemized deductions: How to choose

Not sure which deduction to claim? 

Follow these steps:

1. Gather your documents

• Mortgage interest statement (Form 1098)
• Property tax bills
• Receipts for donations
• Medical bills
• Other qualifying expenses

2. Calculate total itemized deductions using IRS Form 1040 Schedule A
3. Compare to your standard deduction amount
4. Choose the higher option

Some deductions also apply only at the state level—so even if you use the standard deduction federally, itemizing might still benefit your state return.

Tax situations that favor itemizing

Still on the fence? 

You may want to itemize if:

• You had large unreimbursed medical bills
• You paid real estate taxes and mortgage interest
• You made substantial charitable donations
• You suffered a loss in a federally declared disaster
• You had significant gambling losses offset by winnings
• You qualify for unique deductions like work expenses related to a disability

Pros and cons at a glance

Standard deduction

Pros:

• Fast and easy to claim
• No documentation required
• Ideal for renters or those with minimal deductions
• Simple and audit-friendly

Cons:

• Doesn’t account for high actual expenses
• May not provide the biggest tax break if you qualify for large itemizable deductions

Itemized deductions

Pros:

• Potential for greater total deductions
• Lets you deduct actual qualifying expenses (e.g., mortgage interest, property taxes)
• Could lower your tax liability significantly if your expenses are high

Cons:

• Requires detailed record-keeping and receipts
• More complex filing (requires Schedule A)
• Some deductions have limits or thresholds based on your income

State and local tax deductions: Are you leaving money on the table?

Almost everyone pays some form of state or local tax—and these can be deductible if you itemize:

• Real estate taxes: Found on Form 1098 or your tax bill
• State/local income taxes: Reported on your W-2 or payment vouchers
• Sales tax: Optional deduction if it exceeds state income tax
• Personal property tax: If based on vehicle value (check your registration)

Pro tip: Combine your mortgage interest and state/local taxes. If that total tops your standard deduction, itemizing could be the smarter move.

Final thoughts: Ask a tax professional

Choosing between standard versus itemized deductions isn’t one-size-fits-all. The best path depends on your finances, your homeownership status, and what records you’ve kept.

A tax professional can help you evaluate your unique situation and stay within IRS rules.

Next steps for maximizing deductions

• Use a tax deduction calculator to estimate your savings potential
• Begin organizing receipts and tax records early in the year
• Schedule time with a tax advisor to review your options
• Explore mortgage and refinance options if you’re planning a home purchase or renovation

If you’re thinking about buying a home—where itemizing often makes sense—let GO Mortgage help you plan ahead.

Get started by sharing some basic details about your financing needs, or call us at (800) 444-RATE to speak with a mortgage advisor today.