88% of taxpayers now take the standard deduction under OBBBA versus 70% before TCJA, because the nearly doubled deduction ($16,100 single / $32,200 married) exceeds itemizable expenses for most filers. Before TCJA, the $8,300 single deduction was low enough that homeowners with mortgage interest, state taxes, and charitable giving could often itemize for a larger deduction.
The SALT (State and Local Tax) cap is the change OBBBA made rather than preserved: $10,000 under TCJA, $40,400 for 2026. Residents of high-tax states like California, New York and New Jersey paying $15,000–$30,000+ in state and property taxes can now deduct all of it. The relief is not universal — the cap phases down above $505,000 of modified AGI and never falls below $10,000, so the highest earners are back where they were.
For most Americans, the math is straightforward: the standard deduction produces a lower tax bill than itemizing unless your combined mortgage interest, SALT (capped at $40,400 in 2026), and charitable contributions exceed $16,100 (single) or $32,200 (married). A couple with a $300,000 mortgage at 6.5% ($19,500/year in interest), $15,000 in state and property taxes, and $5,000 in charitable giving has $39,500 in deductions — $7,300 above the standard deduction, saving $1,606–$1,752 by itemizing at the 22–24% rate.
*Assumes 6.5% mortgage rate, the $40,400 2026 SALT cap, standard charitable giving| Scenario | Standard Deduction | Itemized Deduction | Better Option |
|---|
| Renter, no donations | $16,100 | $2,000–$5,000 | Standard |
| Homeowner, $250K mortgage | $32,200 (married) | $28,000–$32,000 | Standard (close) |
| Homeowner, $500K mortgage | $32,200 (married) | $38,000–$45,000 | Itemize |
| High SALT state, high income | $32,200 (married) | $35,000–$50,000 | Itemize |
