How much did the One Big Beautiful Bill raise the standard deduction for 2025, and does it change whether I should itemize?

The One Big Beautiful Bill Act (OBBBA) significantly increased the standard deduction for the 2025 tax year, making it even harder for most taxpayers to benefit from itemizing deductions.

2025 Standard Deduction Amounts (OBBBA-adjusted):

Note: The OBBBA also created additional deductions (tips, overtime, car loan interest, seniors) that stack on top of the standard deduction — so the total tax benefit for qualifying individuals can be significantly higher.

Should you itemize for 2025?

You should itemize only if your allowable deductions exceed the standard deduction for your filing status. For 2025, itemizable deductions include:

• SALT (state and local taxes): Up to $40,000 (new OBBBA cap, up from $10,000)
• Mortgage interest: On up to $750,000 of acquisition debt
• Charitable contributions: Cash donations up to 60% of AGI; appreciated property up to 30%
• Medical expenses: Only the amount exceeding 7.5% of your AGI
• Casualty losses: Only in presidentially declared disaster areas

Who actually benefits from itemizing in 2025:

• Homeowners in high-tax states (CA, NY, NJ, IL) with large property tax bills AND mortgage interest
• Very generous charitable givers
• Taxpayers with unusually high medical expenses

Quick rule of thumb: If your mortgage interest + state income/property taxes + charitable giving are less than $31,500 (MFJ) or $15,750 (single), you take the standard deduction — full stop. With the raised SALT cap, some homeowners in high-tax states who previously couldn't itemize may now benefit from doing so.

Important: You can't take both. Choose the higher of standard vs. itemized each year. Tax software will calculate both and choose the one that minimizes your tax automatically.