Standard Deduction vs. Itemized Deductions: Why Most Taxpayers Don’t Benefit from Mortgage or Property Tax Deductions
Every year, many taxpayers ask: Can I deduct my mortgage interest? What about my property taxes? And while these are legitimate questions, the real answer depends on whether you itemize deductions or claim the standard deduction. For the vast majority of taxpayers, the standard deduction provides more tax savings—meaning those extra deductions don’t actually help.
Let’s break it down.
What Is the Standard Deduction?
The standard deduction is a fixed amount that reduces your taxable income. The IRS adjusts this figure annually for inflation. For 2025, the standard deduction is:
$14,600 for single filers
$29,200 for married filing jointly
$21,900 for heads of household
Most taxpayers—roughly 90%—take the standard deduction. Why? Because it usually adds up to more than their itemized deductions.
What Are Itemized Deductions?
Itemized deductions are specific expenses the IRS allows you to deduct, such as:
Mortgage interest
State and local taxes (SALT) — including property taxes, capped at $10,000
Charitable contributions
Medical expenses (but only the portion that exceeds 7.5% of your income)
To benefit from itemizing, the total of these deductions must exceed the standard deduction amount. And for most taxpayers, that doesn’t happen.
The Mortgage and Property Tax Myth
It’s a common misconception: “I bought a house, so I’ll get a big tax break.” Not necessarily.
Let’s say you pay $7,500 in mortgage interest and $8,000 in property taxes. Sounds like a lot, right? But remember—the SALT deduction is capped at $10,000. So in this example, your total itemized deductions would be $17,500.
That’s still less than the $29,200 standard deduction for a married couple. Meaning: no tax benefit from your mortgage or property taxes.
Who Actually Benefits from Itemizing?
People who make large charitable contributions are the ones who tend to benefit from itemizing. For example, if you’re giving $20,000 a year to qualified charities and also paying mortgage interest and property taxes, your deductions might finally exceed the standard deduction threshold.
But for most Americans, the math simply doesn’t work.
This Could Change After 2025
The current rules are part of the 2017 Tax Cuts and Jobs Act, which sunsets after 2025. That means:
The standard deduction will drop (unless Congress acts), and
The $10,000 SALT cap may be lifted—possibly to $40,000 under a new proposal known informally as the "Big, Beautiful Bill."
If that happens, more taxpayers might find itemizing beneficial again. But for now, it’s generally not worth the hassle unless your deductions are unusually high.
Bottom Line:
If you're not giving significantly to charity and your itemized deductions don’t exceed the standard deduction, those mortgage and property tax payments won’t help your tax return. Focus your energy where it matters—and always review with a qualified tax professional to make sure you’re making the most of your deductions.