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Every tax season brings its own set of challenges, and year after year, many taxpayers find themselves leaving money unclaimed simply because they’re unaware of all the deductions available to them.
While most individuals are familiar with standard deductions—such as those related to student loans or mortgage interest—it’s often the lesser-known deductions that can significantly impact your tax return.
With the Internal Revenue Service (IRS) tax code spanning thousands of pages, even the most financially savvy taxpayers can easily overlook potential savings.
These hidden deductions aren’t just for the wealthy or business owners; they’re accessible to all taxpayers across various income levels.
To help you maximize your savings this tax season, we’ve compiled a list of eight surprising tax deductions you may qualify for.
8 Tax Deductions You May Qualify For
Here are some of the most commonly overlooked deductions that you might be able to take advantage of:
1. Out-of-Pocket Charitable Contributions
Many are aware that donations to qualified charities are deductible, but did you know that out-of-pocket expenses incurred while volunteering can also be deducted?
If you purchase supplies for a nonprofit, cover travel expenses to volunteer, or drive to charitable events, you can keep track of those costs.
Be sure to save your receipts and mileage notes, as these can provide valuable tax benefits.
2. Private Mortgage Insurance
For homebuyers who put down less than 20% on a home, private mortgage insurance (PMI) is often a requirement.
However, many people are unaware that these premiums can be deducted for those with adjusted gross incomes below $100,000, with a gradual phase-out for incomes up to $109,000.
This deduction has been extended multiple times and can save qualifying homeowners hundreds of dollars each year.
3. State Sales Tax Deduction
If you reside in a state that does not have an income tax, you might have the opportunity to deduct state sales tax instead.
The IRS permits taxpayers to deduct either state sales tax or state income tax, depending on which is higher.
Large purchases, such as vehicles or high-end appliances, can make this deduction particularly beneficial.
4. Health Insurance Premiums for the Self-Employed
Self-employed individuals who pay for their own health insurance could deduct their premiums—this includes medical, dental, and long-term care insurance for themselves and their dependents.
This deduction is advantageous as it can be claimed regardless of whether you itemize your deductions, making it accessible to many who struggle to hit the medical expense threshold.
5. Medical Travel Expenses
While most taxpayers understand that they can deduct certain medical expenses exceeding 7.5% of adjusted gross income, they often overlook the travel costs associated with obtaining medical care.
The IRS allows deductions for expenses like:
- Mileage driven to medical appointments
- Parking fees and tolls
- Public transportation costs
- Lodging expenses for medical treatment (up to a set amount)
- Meals that are part of inpatient care
If you’ve had multiple visits to specialists or traveled far for treatment, accumulating these expenses can lead to a substantial deduction.
6. Home Office Deduction
Many people mistakenly believe that only self-employed individuals can claim the home office deduction.
However, if you use part of your home exclusively for work and your employer doesn’t reimburse you, you might be eligible to deduct a portion of your rent, utilities, or even internet bills.
This deduction is available to both employees and self-employed persons who meet specific IRS criteria.
7. Jury Duty Pay Turned Over to Your Employer
If you’ve served on a jury and your employer continued to pay your salary during your absence—while requiring you to hand over your jury duty compensation—you can actually deduct this amount from your taxable income.
This often-overlooked deduction is a simple way to reduce your overall tax liability.
8. Student Loan Interest Paid by Someone Else
In cases where someone else, like a parent, pays your student loan interest, the IRS allows you to claim this deduction as if you paid it yourself.
As long as no one else claims you as a dependent, you can generally deduct up to $2,500 of student loan interest—even if the funds for the payment didn’t come directly from you.
Take Advantage of These Deductions This Tax Season
Understanding the full scope of deductions, you may be entitled to can significantly impact your tax return.
By being aware of these hidden treasures within the tax code, you have the potential to maximize your savings.
Keep detailed records, consult resources, and don’t hesitate to ask your tax professional about these options to ensure you’re making the most of your tax situation.
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