A taxpayer hands you $9,400 of receipts and asks whether itemizing beats the standard deduction. The answer turns on six separate floors, caps, and percentage limitations, each with its own trap.
Itemized deductions are personal expenses, such as medical bills, state and local taxes, mortgage interest and gifts to charity, that the taxpayer lists one by one on Schedule A. They replace the standard deduction, so they only help when they add up to more. For 2025 the standard deduction is $15,750 single, $31,500 married filing jointly (MFJ), and $23,625 head of household (HoH), so a Schedule A total below those numbers is wasted.
Four rules shape every Schedule A decision:
- The Pease overall limitation on itemized deductions does not apply, so the Schedule A total is not phased down as adjusted gross income (AGI) rises.
- A married filing separately (MFS) taxpayer whose spouse itemizes must itemize too, even if that gives them a zero deduction.
- The One Big Beautiful Bill Act (OBBBA) senior deduction of $6,000 per individual age 65 or older is claimed on Schedule 1-A.
Common mistakes
- Applying the old SALT cap. Candidates deduct only $10,000 of state and local taxes. The 2025 cap is $40,000, and it can shrink toward the $10,000 floor only when MAGI is above $500,000.
- Deducting the whole long-term care premium. A 72-year-old who pays an $8,000 premium can count only $6,020, and that amount still goes through the 7.5% medical floor.
- Applying the 10% casualty floor per event. The $100 floor comes off each event, but the 10% of AGI reduction applies only once, to the combined total of all events.
Bottom line
- Medical floor is 7.5% of AGI permanently; long-term care premiums cap by age from $480 to $6,020
- SALT cap is $40,000 ($20,000 MFS) for 2025, phasing down 30% of MAGI over $500,000 to a $10,000 floor
- Acquisition debt ceilings: $750,000 after Dec 15 2017, $1,000,000 for Oct 1987 through Dec 2017 debt
- Investment interest is limited to net investment income; excess carries forward indefinitely, traced by use of proceeds
Exam shortcut
Read the stem for the AGI first and pre-compute both floors: 7.5% for medical and 10% for casualty. Most medical stems are engineered so the total sits just above or just below the floor. When a stem mentions what the borrowed money bought, tracing is the tested point, and the collateral in the sentence is the distractor.
The full lesson (about 3,998 words, 27 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
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