Standard vs. Itemized Deduction Calculator

Key terms

Estimated AGI (adjusted gross income)

To estimate your adjusted gross income, add up your taxable income, such as wages and salaries, net business income, capital gains, and miscellaneous income. Then subtract adjustments you are allowed to take even if you do not itemize deductions, such as qualified contributions to retirement accounts, alimony paid and the self-employed health insurance deduction.

Tax filing status

Choose the filing status you expect to use when you file your return:

• Single
• Married – Jointly (or Surviving Spouse)
• Married – Separately
• Head of Household

If you are married and filing separately, and your spouse itemizes deductions, you cannot take the standard deduction.

Number of blind filers

Enter the number of tax filers (you and your spouse) who are considered legally blind. Do not enter more than two.

Number of filers age 65 or older

Enter the number of tax filers (you and your spouse) who are age 65 or older at the end of the year. Do not enter more than two.

Medical expenses

Enter your expenses paid to prevent or treat injury or disease. Include medical insurance premiums, doctor and hospital visits, prescription and over-the-counter drugs, glasses and contact lenses, crutches, canes, and hearing aids.

Dental expenses

Enter any amounts you paid to a dentist or for dental care.

State and local income taxes

Enter the amount you paid for state and local income taxes. Include estimated state and local income taxes, tax paid when you filed a state or local income tax return, and tax withheld from your paycheck.

You should also include sales tax you paid through the year, using either your actual tax paid or the optional sales tax tables provided by the Internal Revenue Service (IRS).

Subtract any refund you received during the year of state or local taxes paid from the total.

Personal property taxes

Enter personal (non-real estate) property taxes, such as annual vehicle license fees based on the value of your vehicle.

Real estate taxes

Deduct real estate taxes in the year you paid them. Do not include real estate taxes you claimed elsewhere as a business expense. If you have a mortgage and pay real estate taxes into an escrow account, deduct your real estate taxes in the year your mortgage company pays them from your escrow account.

Other taxes

Enter any other deductible taxes you paid.

Home mortgage interest and points

Enter the total qualifying mortgage interest you paid during the year. Include deductible points you paid. You can deduct mortgage interest expense on the first $750,000 ($375,000 if married filing separately) of your mortgage. Some taxpayers who purchased their homes before the 2017 Tax Act can deduct mortgage interest on up to $1,000,000 of mortgage principal ($500,000 if married filing separately).

You can also generally deduct the full amount of any mortgage points in the year you pay them.

Investment interest you paid

If you borrow money to make an investment, the interest you pay on the borrowed money is investment interest expense. You can use that expense to offset your investment income. Enter the full amount of investment interest you paid.

Investment interest and dividends received

Your investment interest expense deduction cannot exceed the amount you received in investment interest and dividends. Enter your total interest and dividend income here. Be sure to include your interest and dividend income in your adjusted gross income on the first tab of the calculator as well.

Charitable cash contributions

Enter the total amount of cash contributions you made to nonprofit organizations, for which you received nothing in return. You must maintain a record of your contribution, such as a bank statement or credit card statement, or acknowledgment from the charitable organization.

If you receive some benefit from a charitable donation, such as free entrance to a museum or branded merchandise, enter only the amount of the donation that exceeds the fair market value of the received benefit. If you donate more than $75 to a charity and receive a benefit of more than “insubstantive value,” the charity must disclose to you in writing the value of the benefit you received.

Charitable carryover contributions

If you could not deduct your full charitable contributions in a previous year because of charitable contribution limitations, you can carry the contributions forward for up to 15 years. Enter any charitable contributions carried forward from previous years.

Charitable in-kind contributions

An “in-kind” contribution is a donation of something besides cash, such as goods and services. Enter the value of in-kind contributions you made, such as donations of used clothing and household goods, or a used vehicle.

What’s the difference between the standard deduction and itemized deductions?

The standard deduction is a flat amount, based on your filing status and other factors, that you are allowed to deduct from your taxable income. It is based on the assumption that everyone has a certain amount of income that should be excluded from tax based on normal expenses.

Itemized deductions, on the other hand, are your actual expenses. You must have records of expenses to take itemized deductions, and your deductions must meet the IRS’ qualifications.

You can take either the standard deduction or itemized deductions, not both. When you use tax software and enter your itemized deductions, the program uses the option that gives you the best tax result by default.

What are the pros and cons of the standard deduction?

Advantages of the standard deduction:

• The standard deduction saves time and work. You don’t have to keep records, learn IRS rules or add up deductions.
• You may save taxes over using itemized deductions. The Tax Cuts and Jobs Act of 2017 raised the standard deduction significantly, so more taxpayers benefit from using it.
• You may qualify for a bigger deduction. You may be entitled to an additional deduction if you or your spouse are age 65 or older or blind.

Disadvantages:

• You may possibly miss some tax advantages. If you don’t at least estimate your total itemized deductions, you could miss out on important tax advantages.
• Not all taxpayers qualify for the full standard deduction. If you are married filing separately, for example, and your spouse itemizes deductions, you cannot take the standard deduction. If your parents (or someone else) can claim you as a dependent, your standard deduction may be limited.

What are the pros and cons of itemized deductions?

Advantages of itemizing deductions:

• You may save taxes over using the standard deduction. Especially with recent higher mortgage interest rates, deductible expenses can quickly add up to more than the standard deduction for many taxpayers.
• Itemizing deductions encourages good recordkeeping. Good financial management includes tracking expenses and analyzing them at least once a year. That’s more likely to happen for taxpayers who keep records for tax purposes.

Disadvantages:

• Tracking itemized deductions takes time. It may be easy to estimate major deductions, such as mortgage interest expense and real property expenses. However, finding receipts for prescription and over-the-counter drugs, or collecting charity receipts, can take longer.
• Some deductions are limited. You may be disappointed if you enter major medical expenses expecting a big deduction, only to discover you can deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. In addition, your deduction for total state and local income taxes is now limited to $10,000.