Standard Deduction 2026 Changes: TCJA Expires, Itemising Returns for Millions

One of the most impactful but least-discussed provisions of the Tax Cuts and Jobs Act (TCJA) was the near-doubling of the standard deduction. Before TCJA, millions of Americans itemised their deductions (mortgage interest, state taxes, charity, etc.). After TCJA, the higher standard deduction meant that about 90% of taxpayers found the standard deduction more advantageous, massively simplifying tax returns for most households. If TCJA expires at the end of 2026, the standard deduction reverts to pre-TCJA levels — and tens of millions of Americans will need to dust off their Schedule A and start tracking deductible expenses again. This guide explains what the 2027 standard deduction will be, who is affected, and how to prepare.

How to Prepare: Tracking Itemisable Deductions Starting Now

If TCJA expires, preparing to itemise in 2027 requires knowing what you can deduct. Start tracking these categories in 2026 to be ready:

Mortgage Interest

Form 1098 from your lender shows deductible mortgage interest. Under pre-TCJA law (post-sunset): interest on up to $1 million in mortgage debt is deductible (TCJA reduced this to $750K for new mortgages after Dec 14, 2017 — post-sunset, the $1M limit may return, benefiting homeowners with mortgages between $750K and $1M). Home equity loan interest: deductible for loans used to buy, build, or substantially improve the home (up to $100K limit under pre-TCJA law). Track every mortgage statement — lenders issue Form 1098 in January for the prior year.

State and Local Taxes (SALT)

If SALT cap expires: deductible includes state income taxes paid (from W-2 withholding + estimated tax payments + prior year state tax paid in current year); real property taxes on your home and investment properties; personal property taxes on vehicles (in states that charge this). Keep all state tax payment receipts, property tax bills, and vehicle registration records.

Charitable Contributions

Cash donations: deductible up to 60% of AGI; need acknowledgement letter for donations over $250. Non-cash donations (clothing, furniture to Goodwill): use thrift store fair market value guides; Form 8283 for non-cash donations above $500. Stock donations: deduct fair market value of appreciated stock donated to charity; avoid capital gains. All charitable deductions require documentation — no documentation = no deduction.

Medical Expenses

Medical expenses above 7.5% of AGI are deductible (not changed by TCJA sunset). For a household with $100,000 AGI: deductible threshold = $7,500; expenses above that are deductible. Trackable: insurance premiums (if paid out of pocket, not pre-tax employer plan), prescription drugs, dental, vision, unreimbursed medical procedures. Medical expense deduction is rarely useful except for households with very high medical costs or unusually low income in a medical year.