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Schedule A Explained: How to Itemize Deductions

By The Ledgerism Editorial Team · The Ledgerism Brief Editorial Team produces original, methodology-disclosed accounting and tax research—data trackers, databases, and reference guides built to be the most-cited source in the field. Every figure is verified against primary sources including FASB, the IRS, the PCAOB, NASBA, the AICPA, and state boards of accountancy.

Schedule A is the IRS form you attach to Form 1040 to itemize deductions instead of taking the standard deduction. You claim it when your total deductible expenses (state and local taxes, mortgage interest, medical costs, and charitable gifts) exceed your standard deduction. For tax year 2026, several thresholds shifted under the One Big Beautiful Bill Act (OBBBA, Public Law 119-21), most notably a SALT cap of $40,400 that makes itemizing worthwhile again for many homeowners in high-tax states.

This guide walks through each category on Schedule A, the 2026 numbers that govern them, and the break-even math that decides whether itemizing beats the standard deduction.

What Is Schedule A?

Schedule A (Form 1040) is the attachment where you list itemized deductions. You take the larger of your total itemized deductions or the standard deduction, and Schedule A only helps if the total on it clears the standard deduction for your filing status. Most filers take the standard deduction; itemizing tends to pay off for homeowners with a mortgage, high state taxes, or large charitable gifts.

The form groups deductions into five sections: medical and dental, taxes paid, interest paid, gifts to charity, and casualty and theft losses. You total each section, add them, and carry the result to Form 1040. If that total is below your standard deduction, you generally should not file Schedule A.

The Schedule A Categories at a Glance

Schedule A holds five deduction groups, each with its own limit or floor. A “floor” means only the amount above a percentage of adjusted gross income (AGI) counts; a “cap” means the deduction stops at a dollar limit. The table below summarizes the 2026 rules.

Two 2026 changes reshape this list: the higher SALT cap and the new 0.5% charitable floor. Both are covered in detail below.

The SALT Cap in 2026

State and local taxes (SALT) include state income or sales tax plus property tax, and the 2026 deduction is capped at $40,400 ($20,200 for married filing separately). That is a large jump from the $10,000 cap in place from 2018 through 2024, and it is the main reason itemizing may now beat the standard deduction for many households.

The cap phases down for high earners. In 2026, once modified AGI (MAGI) exceeds $505,000, the $40,400 cap drops by 30 cents for every dollar of MAGI above that line. The reduction stops at a $10,000 floor, so no filer loses the full deduction. A taxpayer with $600,000 MAGI, for example, has $95,000 of excess, which reduces the cap by $28,500, leaving roughly $11,900.

You choose between deducting state income tax or state sales tax, not both. Filers in states with no income tax, such as Texas or Florida, typically deduct sales tax; most others deduct income tax. Property tax on a primary or second home is added on top, and the combined total is what the cap limits. The expanded cap is scheduled to revert to $10,000 for tax years beginning in 2030.

Home Mortgage Interest

Home mortgage interest is deductible on acquisition debt up to $750,000 ($375,000 for married filing separately) for loans taken after December 15, 2017. Acquisition debt is money borrowed to buy, build, or substantially improve a main or second home, secured by that home. Older loans may qualify under a grandfathered $1 million limit.

Your lender reports the interest you paid on Form 1098, which feeds directly into Schedule A. Interest on a home equity loan or line of credit is deductible only if the borrowed funds went toward improving the home that secures the loan, not toward personal spending.

Points paid to obtain a mortgage on a main home are often deductible in the year paid, subject to conditions. For a full breakdown of the reporting form, see the Form 1098 mortgage interest statement guide.

Medical and Dental Expenses (7.5% Floor)

Medical and dental expenses are deductible only to the extent they exceed 7.5% of your AGI. If your AGI is $80,000, the first $6,000 of medical costs produces no deduction; only spending above that counts. This high floor is why most filers cannot use the medical deduction unless they had a major or uninsured expense during the year.

Qualifying costs include payments to doctors, dentists, hospitals, prescription drugs, health insurance premiums you pay with after-tax dollars, long-term care, and mileage driven for care. Cosmetic procedures, over-the-counter drugs without a prescription, and premiums paid pretax through an employer plan generally do not count.

Because the floor is tied to AGI, lowering AGI (for example, through pretax retirement contributions) can raise the deductible portion. Bunching elective procedures into a single year can also push spending over the floor.

Charitable Contributions (New 0.5% Floor in 2026)

Starting in 2026, itemized charitable deductions carry a new 0.5% of AGI floor: only giving above that threshold is deductible. At $200,000 AGI, the first $1,000 of donations produces no itemized deduction. This OBBBA change reduces the benefit of small gifts for itemizers, though the value of larger gifts is mostly preserved.

Ceilings still apply on top of the floor. Cash gifts to public charities are deductible up to 60% of AGI; gifts of appreciated property held over a year are generally limited to 30% of AGI. Amounts above the ceiling carry forward for up to five years. Noncash gifts over $500 require Form 8283.

Keep records: cash gifts need a bank record or written acknowledgment, and gifts of $250 or more need a contemporaneous written receipt from the charity. For planning around the new floor and other 2026 giving rules, see the charitable giving and deductions report and the Form 8283 noncash donations guide.

Standard vs. Itemized: The 2026 Break-Even

You itemize only when your Schedule A total beats your standard deduction. For 2026 the standard deduction is $16,100 (single), $32,200 (married filing jointly), and $24,150 (head of household). If your combined itemized deductions fall below the figure for your status, the standard deduction gives a larger write-off with no recordkeeping.

The higher SALT cap changes the math for 2026. A married couple that pays $30,000 in state and property taxes and $12,000 in mortgage interest reaches $42,000 in itemized deductions, well above the $32,200 standard deduction, so itemizing wins by roughly $9,800. Under the old $10,000 SALT cap, the same couple would have totaled $22,000 and taken the standard deduction instead.

Married couples filing separately must both itemize or both take the standard deduction; one spouse cannot itemize while the other uses the standard amount. For the full decision framework, see standard vs itemized deduction: how to choose.

The New Itemized Deduction Limit for Top Earners

Beginning in 2026, taxpayers in the top 37% bracket face a haircut on the tax value of their itemized deductions. The rule caps the benefit at 35 cents on the dollar rather than 37, by reducing otherwise-allowable itemized deductions by 2/37 of the lesser of total itemized deductions or the income above the 37% bracket threshold. In practice, high earners keep the deduction but at a slightly lower effective rate.

This limitation stacks on top of the SALT phasedown, so filers near or above the top bracket may see two separate reductions. The interaction can be significant, and modeling both effects before year-end is often worthwhile for households with MAGI in the mid-six figures.

FAQ

Do I have to itemize if I have a mortgage?

No. Having a mortgage does not require itemizing. You itemize only if your total Schedule A deductions, including mortgage interest, exceed your standard deduction. In 2026 that break-even is $16,100 (single) or $32,200 (married filing jointly). Many homeowners with small mortgage balances still come out ahead with the standard deduction.

What is the SALT cap for 2026?

The state and local tax deduction is capped at $40,400 for 2026 ($20,200 for married filing separately), up from $10,000 in prior years under OBBBA. The cap phases down by 30% of MAGI above $505,000, reaching a $10,000 floor for the highest earners. The expanded cap is scheduled to revert to $10,000 in 2030.

Can I deduct both state income tax and sales tax?

No. On Schedule A you choose either state and local income tax or state and local sales tax, whichever is larger, not both. Filers in no-income-tax states such as Texas or Florida usually deduct sales tax. Property tax is added on top of whichever you pick, and the combined total is subject to the SALT cap.

What is the medical expense deduction floor in 2026?

Medical and dental expenses are deductible only above 7.5% of your AGI. At $80,000 AGI, only costs above $6,000 count. Qualifying expenses include doctors, hospitals, prescriptions, after-tax insurance premiums, and care-related mileage. Premiums paid pretax through an employer and over-the-counter drugs without a prescription generally do not qualify.

How does the new 0.5% charitable floor work?

Starting in 2026, only charitable giving above 0.5% of AGI is deductible on Schedule A. At $200,000 AGI, the first $1,000 of donations produces no deduction. Ceilings still apply above the floor: up to 60% of AGI for cash gifts to public charities and 30% for appreciated property, with unused amounts carrying forward up to five years.

Which form reports my mortgage interest?

Your lender sends Form 1098, the Mortgage Interest Statement, showing the interest you paid during the year. That figure goes on Schedule A, subject to the $750,000 acquisition debt limit. Home equity loan interest is deductible only if the funds improved the home securing the loan.

Does everyone benefit from the higher SALT cap?

No. The $40,400 cap only helps if you itemize, and itemizing only pays when your Schedule A total beats the standard deduction. High earners also face a phasedown: the cap shrinks by 30% of MAGI above $505,000 in 2026, bottoming out at $10,000. Households below the standard deduction threshold see no benefit at all.

Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.

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