Taxpayers may choose to itemize deductions or claim the standard deduction, depending on which produces the lower tax liability. Below are the standard deduction amounts along with the updated rules for 2025 under the One Big Beautiful Bill Act (OBBBA).
📊 Standard Deduction Amounts
| Tax Year | Single | Married Filing Jointly |
|---|---|---|
| 2025 | $15,750 | $31,500 |
| 2024 | $14,600 | $29,200 |
| 2023 | $13,850 | $27,700 |
🏘️ State and Local Tax Deduction (SALT)
Effective 2025–2029
- Combined cap for:
- State & local property taxes, AND
- State income or sales tax
- Cap increases from $10,000 → $40,000
- Phase-out begins when AGI exceeds $500,000
- Reduced by $50 for every $1,000 over the AGI threshold
🧾 Miscellaneous Itemized Deductions — Permanently Eliminated
The OBBBA permanently removes all miscellaneous itemized deductions that were previously subject to the 2% AGI floor.
🚫 Work-Related Expenses (Formerly Unreimbursed Employee Expenses)
- Union dues
- Job-related travel, tools, uniforms
- Job search expenses
- Professional licensing/certification fees
🚫 Financial & Investment Expenses
- Investment advisor/management fees
- Tax preparation fees
- IRA custodial fees
- Safe deposit box fees
🚫 Other Eliminated Deductions
- Hobby expenses (up to hobby income)
- Credit card convenience fees (e.g., paying taxes)
- Claim of right repayments under $3,000
These deductions cannot be claimed starting in 2025.
❌ Expired Itemized Deductions
🏠 Private Mortgage Insurance (PMI) Deduction
- The PMI deduction expired after the tax year 2021
- Reinstated in the OBBBA for 2026
- Therefore, PMI premiums are NOT deductible for 2025
Previously
PMI was deductible as mortgage insurance premiums on Schedule A if income fell within specific phase-out limits, but this provision is no longer in effect.
🧾 Itemized Deductions Still Allowed in 2025
🏡 Mortgage Interest Deduction
- Mortgages on/after Dec 15, 2017 → deductible on first $750,000 of mortgage debt
- Mortgages before Dec 15, 2017 → limit remains $1,000,000
🛠️ Home Equity Loan Interest
- Deductible only when loan is used to buy, build, or substantially improve the taxpayer’s home
- Not deductible when used for:
- Credit card debt
- Personal loans
- General living expenses
🏥 Medical Expense Deduction
- Only deductible when total qualified expenses exceed 7.5% of AGI
- Must be paid out-of-pocket or with post-tax dollars
🌪️ Casualty & Theft Losses
- Deductible only if tied to a federally declared disaster
- Losses from non-disaster events are not allowed
🔚 Other Notable Deductions That Remain Unavailable
🚫 Interest on Personal Loans
🚫 Moving Expenses (except active-duty military under orders)
🚫 Employee Business Mileage (W‑2 employees)
🚫 Non-disaster casualty/theft losses