4. Consider itemizing
There are 5 main categories of itemizable deductions, subject to various limitations, and if these categories add up to more than the standard deduction, you may want to itemize. For 2025, married couples have a standard deduction of $31,500 and single filers a standard deduction of $15,750. Generally speaking, you can deduct medical expenses, home mortgage interest, state and local taxes, charitable contributions, and theft and casualty losses due to a federally declared disaster. Many deductions have limits, however. For example, you cannot deduct health care costs that are less than 7.5% of your adjusted gross income (AGI).3 Deductible expenses may include unreimbursed fees for doctor and hospital visits, dentists, chiropractors, mental health care, medical plan premiums for which you are not claiming a credit or deduction, and much more. If you are close to 7.5% of AGI, consider getting treatments and paying other medical bills before year-end, particularly if you were planning to do so early in the new year.
Additionally, the new tax legislation passed in July 2025 raises the state and local tax (SALT) deduction cap to $40,000 from $10,000 for single and joint filers—but with several caveats: The full deduction phases out for filers with modified adjusted gross income above $500,000 ($250,000 in the case of a married individual filing separately), and reverts to $10,000 for incomes of $600,000 and above. While the deduction and the phase-out levels will increase by 1% a year, these changes are in effect through 2029, after which point the cap reverts to $10,000. For married couples who file separately, the deduction increases to $20,000 and returns to its previous level of $5,000 in 2030.
Good to know: Starting in 2026, the value of itemized deductions for those in the 37% tax bracket will be capped at 35%, or approximately 35 cents for every dollar they deduct.