15 Tax Deductions Most People Overlook
Most people don’t claim every deduction they’re eligible for. It’s easy to miss a line or overlook a receipt when the forms get complicated. Yet some of these missed breaks can make a real difference in your refund or lower what you owe. This list covers some of the often overlooked deductions that slip past many taxpayers but are worth a second look before you file.
Private Mortgage Insurance (PMI)
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If you bought a home with a down payment of less than 20%, you might have to pay for private mortgage insurance (PMI). But here’s the kicker: PMI premiums are deductible for taxpayers with an adjusted gross income (AGI) under $100,000. If you’ve been paying PMI and haven’t claimed this deduction, you could be missing out on hundreds of dollars back.
Medical Travel Expenses
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Not just your hospital bills or prescriptions, but tax deductions can extend to medical travel costs too. If you’ve had to drive long distances for treatment, you can deduct mileage at 22 cents per mile for 2024. That’s not all; parking fees, tolls, and even meals if you stay overnight for treatment are also deductible. The IRS doesn’t want to leave you high and dry when it comes to medical care.
Out-of-Pocket Charitable Donations
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Everyone knows that cash donations to charity are tax-deductible, but did you know that out-of-pocket costs for charitable work are too? Think about the expenses you incur while volunteering, like the ingredients for that soup you made for a local shelter or the gas to drive to the charity event. All these costs count and can add up, so make sure to save your receipts and track your mileage.
Student Loan Interest Paid by Someone Else
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If someone else, like your parents, is helping pay off your student loans, you can still deduct the interest, just like you paid it yourself. As long as you’re not a dependent, this little-known rule can help you claim up to $2,500 in student loan interest deductions. It’s a pretty sweet benefit for anyone with family support in repaying those loans.
Home Office Deduction
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Think the home office deduction is only for freelancers or small business owners? No! If you work from home, even part-time, you could be eligible for this deduction. As long as the space is used exclusively for work, you can deduct a portion of your rent, utilities, and even internet costs. So, that little corner of your living room might be worth more than you think come tax time.
State Sales Tax Deduction
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Did you know that in some states without income tax, you can deduct state sales taxes instead? That’s right, if you live in places like Texas or Florida, this deduction could really help if you made big-ticket purchases, like a car or boat. You can either use the IRS’s tables or keep track of all your receipts for a more accurate deduction. Either way, it’s money back in your pocket!
Jury Duty Pay Turned Over to Employer
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Serving on a jury is a civic duty, but it can be a financial headache if your employer still expects you to work while you’re off doing your civic duty. Here’s where the taxman steps in: if you turn over your jury pay to your employer, you don’t need to report it as income. The deduction helps you avoid double taxation, putting some extra cash back in your pocket.
Energy-Efficient Home Improvements
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Making your home more energy-efficient doesn’t just help the planet; it can also help your tax bill. Installing solar panels, energy-efficient windows, or a new heating system can qualify you for tax credits. These credits can reduce the cost of these improvements and give you a financial incentive to go green.
Educator Expenses
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Teachers spend their own money on supplies for their classrooms every year. Luckily, the IRS offers a small but mighty deduction to help ease the burden. Educators can deduct up to $250 (or $500 for married couples) on out-of-pocket expenses for classroom supplies. This includes everything from books to art supplies. So if you’re a teacher, don’t forget to claim what you’ve spent on enriching your students’ lives!
Moving Expenses for Military Personnel
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Moving can be expensive, but for military members, there’s good news: you may be able to deduct your unreimbursed moving expenses. This applies whether you’re moving to a new base or transitioning out of the service. From travel costs to lodging to the shipment of household goods, these expenses are tax-deductible as long as the move is permanent and ordered by the military.
Tax Preparation Fees
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Paying someone to file your taxes or using paid software used to mean a possible deduction if you itemized. Now, this break only applies if you’re self-employed. For freelancers and small business owners, those expenses—whether for a CPA or online filing—can still be subtracted on your Schedule C. Employees, though, no longer get this deduction under current tax law. Always check the latest rules before claiming.
Child and Dependent Care Credit
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Paying for child care while you work or look for a job? You could be eligible for the Child and Dependent Care Credit. This credit can offset some of the costs of daycare or care for a disabled family member. It’s a dollar-for-dollar reduction on your tax bill, so if you’ve been paying for child care and haven’t claimed this credit yet, it’s definitely time to get it on your radar.
Business Travel Expenses
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If you’re self-employed, trips for work can cut your tax bill. Flights, hotels, rental cars, meals on the road—all are fair game if the travel is for business. Hang on to every receipt, from airport parking to taxi fares. The IRS wants clear records to back up each claim. Just remember, this only applies to business, not personal getaways.
Legal Fees
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If you’re paying for legal help related to your work or business, those costs might be deductible. This can include legal fees from lawsuits connected to your job, contract disputes, or even fees related to securing your business. However, personal legal costs (like divorce fees) aren’t deductible. So, before you pay your lawyer, double-check if those fees fall into the deductible category.
Casualty and Theft Losses
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If you’ve experienced an unfortunate event, make sure to keep your documentation and check if you qualify for this deduction. Fires, floods, and theft can be a nightmare, but the IRS might ease some of the pain. If you’ve lost property due to a disaster, you might be eligible to deduct your losses. However, the deduction is subject to limits, including a $100 minimum loss per event and a 10% AGI threshold.