The IRS isn't going to remind you about deductions you're eligible for. That's entirely on you. Here are ten commonly overlooked deductions that could put real money back in your pocket at tax time.
1. Student Loan Interest
You can deduct up to $2,500 in student loan interest paid each year, even if you don't itemize. This deduction begins to phase out at higher income levels, but for most borrowers it's fully available and often missed.
2. Home Office Deduction
If you're self-employed and use part of your home exclusively and regularly for business, you can deduct a portion of your rent or mortgage, utilities, and internet. The simplified method allows $5 per square foot, up to 300 sq ft.
3. Charitable Contributions (Non-Cash)
Donating clothing, furniture, or household goods to Goodwill or the Salvation Army is deductible at fair market value. Keep a detailed list and a receipt from the organization — the IRS requires documentation for non-cash contributions over $500.
4. Self-Employment Tax Deduction
If you're self-employed, you pay both the employer and employee portions of Social Security and Medicare taxes. The good news: you can deduct half of this self-employment tax from your gross income, reducing your taxable income significantly.
💡 Self-employed people also get to deduct 100% of health insurance premiums paid for themselves and their families.
5. Educator Expenses
Teachers and other qualifying educators can deduct up to $300 (or $600 if filing jointly and both spouses are educators) for out-of-pocket classroom supplies — no itemizing required.
6. Energy-Efficient Home Improvements
The Inflation Reduction Act expanded tax credits for energy-efficient upgrades. Installing solar panels, upgrading to an energy-efficient HVAC, or adding insulation can earn you credits of 30% of the cost — potentially thousands of dollars.
7. Medical Expenses Above 7.5% of AGI
If your unreimbursed medical expenses exceed 7.5% of your adjusted gross income, you can deduct the excess. For someone with a $70,000 AGI, that means expenses above $5,250 are deductible — including premiums, dental, vision, and some transportation to medical care.
8. IRA Contributions
Contributions to a traditional IRA may be tax-deductible depending on your income and whether you have a workplace retirement plan. The 2025 contribution limit is $7,000 ($8,000 if you're 50 or older). Contributions can be made until the tax filing deadline.
9. Business Use of Your Car
If you use your car for business purposes — not commuting — you can deduct the business mileage at the IRS standard rate (67 cents per mile in 2024). Keep a mileage log with dates, destinations, and business purposes.
10. State and Local Taxes (SALT)
You can deduct up to $10,000 ($5,000 if married filing separately) in state and local income taxes or sales taxes combined with property taxes. If you live in a high-tax state, this cap is an important planning consideration.
🎯 Bottom line: Work with a qualified tax professional or use reputable tax software to ensure you capture every deduction you're entitled to. Leaving money on the table isn't required.