Schedule A changes reshape the 2026 itemizing decision

What if last year's standard deduction beat itemizing by only a few hundred dollars? For that client, the 2026 calculation is worth rerunning. The higher state and local tax (SALT) deduction cap rises again, but a new charitable-contribution floor can offset part of the gain.

The higher SALT cap changes your approach

The expanded SALT limit began at $40,000 in 2025 and increases to $40,400 for 2026 ($20,200 for married filing separately). The limit is reduced by 30% of modified adjusted gross income (MAGI) above $505,000 ($252,500 for separate filers), but cannot fall below $10,000 ($5,000 for separate filers). The temporary increase runs through 2029.

For a homeowner, state income tax withholding (reported in Box 17 of Form W-2 for employees) and qualifying property taxes may exceed the former $10,000 SALT ceiling. For example, a married couple filing jointly who pays $30,000 in qualifying state and local taxes could deduct the full amount with MAGI below the phase-down threshold. At $550,000 of MAGI, however, the 2026 SALT cap drops to $26,900, leaving $3,100 of those taxes nondeductible.

Starting in 2026, itemizers generally can deduct charitable contributions only to the extent they exceed 0.5% of adjusted gross income (AGI), subject to other applicable limits. Also new for 2026, §68's 2/37 limitation reduces itemized deductions for affected higher-income taxpayers. The reduction is 2/37 of the lesser of:

• Their otherwise allowable itemized deductions; or
• The amount by which taxable income, computed before itemized deductions, exceeds the start of the 37% bracket

A bigger SALT deduction does not necessarily mean a comparable increase in total allowable deductions.

Familiar Schedule A expenses still require judgment

Medical expenses generally are deductible only to the extent they exceed 7.5% of AGI. Even what qualifies deserves your attention; in September 2026, the IRS clarified that a wearable device purchased and used primarily to manage a specific disease may qualify as a medical expense, while general wellness use alone is insufficient.

Deductible home mortgage interest still depends on the applicable debt rules; certain casualty losses and excess deductions passed through from estates or trusts also require a careful look at what qualifies and where to report it.

Give borderline itemizers another calculation

Pay particular attention to 2025 returns where itemized deductions fell just short of the standard deduction. Compare the client's projected 2026 allowable expenses with the 2026 standard deduction rather than carrying forward the old choice. A change in income may reduce the SALT allowance even as property taxes rise; a shift in charitable giving could move the result the other way.

Learn from A.J. Reynolds' practical experience

NATP's Schedule A 1040 Refresher offers an in-depth look at these decisions. Alongside the major Schedule A deductions, the program covers less-common matters such as claim-of-right repayments and excess deductions from estates and trusts.

A.J. Reynolds, EA, brings more than 30 years of experience with individual and business tax matters, plus the relatable, in-the-trenches perspective that makes him such an engaging instructor. His work includes IRS representation, and he received the National Association of Enrolled Agents' 2024 Excellence in Education Award. He's another strong reason to make time for this workshop.

Join NATP's Schedule A 1040 Refresher online workshop Dec. 14, 2026. The session is also available on demand after the live event.