Compare Your Deductions: A Friendly Guide

Hey savvy saver! 🧾 Curious about how your deductions stack up? We've sifted through the latest IRS data so you don't have to. This guide breaks down average itemized deductions by income and state, plain and simple.

Think of it as your cheat sheet for figuring out if you're deducting too little, just right, or maybe even leaving money on the table. Let's dig in!

Want to dig deeper?

The IRS offers helpful resources like

👉 Topic No. 501 – Should I Itemize?

👉 Publication 501 – Standard vs. Itemized Deductions

These explain when it makes sense to itemize and how to calculate your deduction strategy.

Why Itemize? The Benefits of Itemized Deductions

Itemizing deductions can be a game-changer for your tax return. While the standard deduction is easy and convenient, itemizing can unlock bigger savings, especially if you:

• Have high medical expenses or mortgage interest
• Pay significant state and local taxes
• Give generously to charities
• Incur major unreimbursed expenses tied to your work

By itemizing, you're tailoring your tax return to reflect your real expenses, and that could mean a lower tax bill or a bigger refund. 

Average Itemized Deductions by Income Level

Here's how deductions stack up across different income levels. Remember, these are the average deduction amounts for people who have itemized deductions on their returns. Don’t treat them as goals. Your situation might be totally different, and that’s okay!

Source: IRS, "SOI Tax Stats - 2022 Individual Income Tax Returns." Accessed June 5, 2025. https://www.irs.gov/statistics/soi-tax-stats-individual-income-tax-returns.

• Avg. Itemized Deductions = Total Deductions Amount / Number of Returns with Itemized Deductions
• % of Itemized Returns = (Number of Returns with Itemized Deductions / Number of Returns) x 100

Smart Move: Don’t stress if your numbers don’t match these. Think of this as a compass, not a calculator. Your actual deductions depend on your lifestyle, state laws, and whether you itemize at all.

How does your state stack up? Some states have higher average deductions due to higher taxes, higher housing costs, or more generous givers. Here's the scoop:

Source: IRS, "SOI Tax Stats - Historic Table 2." Accessed June 5, 2025. https://www.irs.gov/statistics/soi-tax-stats-historic-table-2.

• Avg. Itemized Deductions = Total Deductions Amount / Number of Returns with Itemized Deductions
• % of Itemized Returns = (Number of Returns with Itemized Deductions / Number of Returns) x 100

💡 Pro Tip: Use these averages as a reference point when organizing your deductions.

📍 Regional Reality Check: In high-cost states like California and New York, itemized deductions often exceed the standard deduction. But in lower-deduction states, the standard deduction may save you more.

When the Standard Deduction Might Be Better

If you don’t have many deductible expenses, the standard deduction could save you more time—and still reduce your tax bill. It's often the better option if:

• You rent and don’t pay mortgage interest
• You don’t have high out-of-pocket medical costs
• You don’t contribute much to charity or pay state/local taxes
  

Not sure if itemizing is right for you?

Our software automatically compares standard vs. itemized deductions and helps you pick the best options—no spreadsheets, no stress.

👉 Start a tax return today. Sign up for an account today!

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