Tax season is here, and let’s be honest—it can feel like a never-ending maze of receipts, forms, and calculations. But the good news is, you don’t have to navigate it blindly. As an individual filer, there are probably a ton of deductions you’re missing out on that could put some cash back in your pocket. I know I’ve overlooked a few in the past, so I decided to dig into the ones that might be flying under your radar.
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1. State Sales Taxes
If you live in a state that doesn’t have an income tax (lucky you!), you might be able to deduct state sales taxes instead. The IRS gives you the option to either deduct state income taxes or state sales taxes, but here’s the thing—if you’ve made big purchases throughout the year (think car, appliances, or other big-ticket items), the sales tax deduction could end up saving you more. It’s an often-overlooked one, but totally worth considering.
2. Home Office Deduction (Yes, Really)
You don’t have to be running a full-on business from home to qualify for the home office deduction. If you’re working from home—even part-time—you might be able to deduct a portion of your rent, utilities, and internet costs. And no, you don’t have to have a fancy, dedicated office space either. As long as you’re using a space regularly and exclusively for work, you’re good to go. I personally didn’t realize how many home office expenses I could claim until I did some research.
3. Student Loan Interest
Student loan debt is a pain (no surprise there), but did you know you can deduct up to $2,500 of the interest you paid on your loans? If you’re in the right income bracket, this deduction is a no-brainer and can really help you out come tax time. I didn’t even know about this one until a few years ago, and it made a bigger difference than I expected.
4. Medical Expenses (If You’ve Had a Lot)
Here’s a sneaky one: if you’ve had significant medical expenses, you can deduct the portion that exceeds 7.5% of your adjusted gross income (AGI). This can include doctor’s visits, prescription medications, and even travel costs related to medical treatments. But here’s the catch—it only applies if your total expenses for the year are high enough. Still, if you’ve been dealing with health issues, this could be a game-changer.
5. Charitable Donations
Donating to charity? That’s great. Donating to charity and getting a tax break? Even better. You can deduct donations of money or goods to qualifying charities, but here’s the kicker: don’t forget to keep track of your non-cash donations. Things like clothing or household items you donate to Goodwill (or similar places) count, and those deductions can add up over time. Just make sure to get a receipt for anything you donate, even if it’s small.
6. Job-Related Education Expenses
If you’ve taken any courses to improve your skills for your current job, you might be able to deduct the cost of tuition, books, supplies, and even travel. The catch? The education needs to be related to your current job. If you’re planning on switching careers and going back to school for something completely new, that’s a different ballgame. But if you’ve been taking courses to stay relevant in your field, don’t forget to deduct those costs.
7. Child and Dependent Care Credit
This is a huge one if you have kids or dependents. The Child and Dependent Care Credit lets you deduct a portion of the costs of care for dependents under the age of 13 (or for a spouse or other dependent who can’t care for themselves). This can include daycare, after-school programs, and even summer camp. It’s a credit, not a deduction, which means it directly reduces the amount of taxes you owe. So, if you’ve got childcare expenses, this could save you some serious cash.
8. Energy-Efficient Home Improvements
If you’ve made any energy-efficient improvements to your home—like installing solar panels, energy-efficient windows, or new insulation—you might qualify for a tax credit. There’s a specific credit for solar energy systems, which can cover a substantial portion of the cost. So, if you’ve been thinking about going green, your taxes might be the perfect incentive to finally make the switch.
9. Unreimbursed Work Expenses
This one’s especially relevant if you work in a job where you’re not reimbursed for things like work supplies, travel, or meals. If you’re self-employed or just not getting reimbursed by your employer, you can deduct these expenses. Things like work-related subscriptions, supplies, and travel costs are all deductible under this category. But, like always, you’ll need to keep good records and receipts.
10. Retirement Contributions
Finally, don’t forget about retirement! Contributing to a traditional IRA or 401(k) can lower your taxable income for the year, potentially putting you in a lower tax bracket. Plus, the more you contribute to your retirement, the more you’re setting yourself up for a comfortable future. It’s a win-win.
Here’s the Deal
Taxes are a headache, but they don’t have to be all bad. A few of these often-overlooked deductions might be just the thing to save you some money, especially if you’re in the habit of overlooking the fine print. Take a look at your finances, see where you might be missing out, and don’t be afraid to claim what you’re entitled to.
