The Hidden Tax Deductions Most People Miss When Filing
Every year, taxpayers leave money on the table simply because they overlook valuable tax deductions. These deductions can lower your taxable income, reducing the amount you owe or increasing your refund. Whether you file on your own or work with a tax professional, being aware of these commonly missed deductions can help you maximize your tax savings. Here are some of the most frequently overlooked deductions you should consider when filing your return.
1. State Sales Tax Deduction
If you live in a state without an income tax, you can deduct state sales tax instead. Even if your state has an income tax, you might benefit from deducting sales tax on large purchases like a car or major home improvement materials. The IRS provides a calculator to help determine your deduction amount.
2. Student Loan Interest Paid by Parents
If your parents paid off some or all of your student loans, you may be able to deduct up to $2,500 in student loan interest, even if the loan is in their name. As long as you’re not a dependent on their return, the IRS considers this a gift that allows you to take the deduction.
3. Medical and Dental Expenses
Many people overlook medical expenses that qualify for deductions. If your medical and dental expenses exceed 7.5% of your adjusted gross income, you may be able to deduct them. Eligible expenses include prescriptions, doctor visits, surgeries, and even travel costs related to medical care.
4. Job Search Expenses
If you were searching for a job in the same field you previously worked in, some job search costs may be deductible. This includes resume services, travel for interviews, and career coaching. While the Tax Cuts and Jobs Act suspended this deduction through 2025, it may still apply to certain self-employed individuals.
5. Home Office Deduction
If you work from home, even part-time, you may qualify for a home office deduction. This applies to self-employed individuals and freelancers who use a dedicated space in their home exclusively for business. The IRS offers both a simplified and a detailed method to calculate this deduction.
6. Charitable Contributions (Beyond Cash Donations)
You may already know that donations to qualified charities are deductible, but did you know you can also deduct the value of donated items like clothing, household goods, and even mileage driven for charitable work? Keep receipts and records of all donations to claim this deduction.
7. Educator Expenses
Teachers and educators can deduct up to $300 per year for classroom supplies, including books, art materials, and even COVID-19 protective equipment. This deduction applies even if you don’t itemize your deductions.
8. State Tax Refund Deduction
If you owed and paid state taxes last year, you may be able to deduct those payments on this year’s return. This applies only if you itemized deductions in the prior year.
9. Moving Expenses for Military Members
While most taxpayers can no longer deduct moving expenses, active-duty military members moving due to a change in station can still claim this deduction. This includes costs for transportation, lodging, and shipping personal belongings.
10. Dependent Care Credit
If you pay for daycare, after-school programs, or summer camps for a dependent under 13, you may qualify for the Child and Dependent Care Credit. This credit can be worth up to 35% of qualifying expenses, depending on your income.
Maximizing Your Deductions
Many taxpayers miss these deductions simply because they’re unaware they exist. Keeping good records, tracking eligible expenses, and consulting a tax professional can ensure you’re not paying more than you owe.
At Remote Tax Advocates, we specialize in identifying every tax-saving opportunity available to you. If you need help maximizing your deductions, reach out to our team today!