When tax season rolls around, everyone’s looking for ways to lower their tax bill. You might know the big ones—like mortgage interest and charitable donations—but there are plenty of lesser-known deductions that can save you money. Claiming these tax breaks could mean keeping more of your hard-earned cash.
In this guide, we’ll dive into the tax deductions you might not know about, so you can maximize your refund or minimize what you owe.
- Educator Expenses Deduction
If you’re a teacher, classroom supplies can really add up. But here’s some good news: educators can deduct up to $300 of unreimbursed expenses for classroom supplies, books, and even computer equipment. For married couples who are both teachers, that amount doubles to $600. And yes, even those virtual classroom tools count.
Who qualifies?
This deduction is available to kindergarten through grade 12 teachers, instructors, counselors, principals, or aides who work at least 900 hours a school year.
- Student Loan Interest Deduction
Many people are aware they can deduct the interest paid on student loans, but what’s often overlooked is that this deduction can be claimed even if you don’t itemize your taxes. You can deduct up to $2,500 in student loan interest per year. This deduction reduces your taxable income, which means it can directly lower the amount of tax you owe.
Who qualifies?
To qualify, your modified adjusted gross income (MAGI) must be less than $85,000 (or $170,000 if you’re married filing jointly).
- State Sales Tax Deduction
Do you live in a state with no income tax? You may be able to deduct the sales taxes you’ve paid instead. Even if your state does collect income tax, you might still save more by deducting sales taxes, especially if you’ve made big purchases, like a new car or furniture. The IRS provides a calculator to help you estimate your deduction.
Who qualifies?
You can choose to deduct either state and local income taxes or state and local sales taxes—but not both.
- Medical and Dental Expenses
If you’ve had major medical bills, you may be able to deduct a portion of those expenses. You can claim unreimbursed medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI). These expenses can include everything from doctor visits and surgeries to prescription medications and even transportation to medical facilities.
Who qualifies?
Any taxpayer with unreimbursed medical expenses that exceed the 7.5% threshold.
- Home Office Deduction
With remote work becoming more common, the home office deduction is a hidden gem. If you’re self-employed or run a side business from home, you can deduct the expenses related to maintaining a home office. This includes a portion of your rent or mortgage, utilities, and even office furniture.
Who qualifies?
You must use a portion of your home regularly and exclusively for business purposes.
- Lifetime Learning Credit
If you’re taking classes to improve your skills or learn something new, you may be eligible for the Lifetime Learning Credit. This tax credit can cover up to 20% of the first $10,000 of qualified education expenses, which means you can get a credit of up to $2,000. Unlike deductions, tax credits reduce the actual tax you owe, making this credit particularly valuable.
Who qualifies?
The credit is available to those with a MAGI of $90,000 or less (or $180,000 for joint filers).
- Moving Expenses for Active Duty Military
Active-duty military members who move due to a change in station can deduct moving expenses. This includes travel, lodging, and even the cost of shipping your belongings to your new home. However, this deduction is only available to military personnel; the general public no longer qualifies due to changes in tax law.
Who qualifies?
Active-duty military members moving to a new permanent station.
- Self-Employment Tax Deduction
Self-employed individuals are required to pay both the employer and employee portion of Social Security and Medicare taxes. However, you can deduct the employer portion of the self-employment tax on your Form 1040, which is roughly half of the total self-employment tax you paid.
Who qualifies?
Anyone who is self-employed and paid self-employment taxes during the tax year.
- Charitable Mileage Deduction
Did you know that if you use your car for charitable purposes, you can deduct 14 cents per mile driven? This deduction is available when you drive your car to volunteer or to donate goods. It’s a small deduction, but every little bit helps.
Who qualifies?
Anyone who uses their vehicle for charity-related activities, such as driving to a volunteer event.
- Retirement Savings Contributions Credit (Saver’s Credit)
If you’re saving for retirement, you may qualify for the Saver’s Credit. This credit can be up to 50% of the first $2,000 you contribute to a retirement plan like an IRA or 401(k). Unlike deductions, this credit reduces the amount of tax you owe.
Who qualifies?
Individuals with a MAGI under $36,500 ($73,000 for married couples filing jointly) can benefit from this credit.
- Energy-Efficient Home Improvements
If you’ve made energy-efficient improvements to your home, such as installing solar panels or energy-efficient windows, you could qualify for a tax credit. The Residential Energy Efficient Property Credit can cover up to 30% of the cost of certain improvements.
Who qualifies?
Homeowners who have installed qualified energy-efficient systems during the tax year.
- Health Savings Account (HSA) Contributions
Contributions to a Health Savings Account (HSA) are tax-deductible, and withdrawals used for qualified medical expenses are tax-free. HSAs offer a triple tax benefit: you contribute pre-tax, grow your balance tax-free, and use the money tax-free for medical expenses.
Who qualifies?
Anyone with a high-deductible health plan (HDHP) can contribute to an HSA.
- Child and Dependent Care Credit
If you’ve paid for child care while you work, look for the Child and Dependent Care Credit. You can claim up to 35% of $3,000 in expenses for one dependent (or up to $6,000 for two or more dependents). This credit can also apply if you’re caring for an elderly parent.
Who qualifies?
Taxpayers who pay for the care of a child under 13 or a dependent adult while working or looking for work.
- Alimony Payments
If you’re paying alimony under a divorce decree finalized before 2019, those payments are tax-deductible. However, if your divorce was finalized after December 31, 2018, alimony payments are no longer deductible due to changes in tax law.
Who qualifies?
Taxpayers paying alimony under pre-2019 divorce agreements.
- Jury Duty Pay Given to Your Employer
If you were called for jury duty and gave your pay to your employer because they continued to pay your salary during that time, you can deduct the amount you handed over.
Who qualifies?
Taxpayers who received jury duty pay but passed it on to their employer.
Conclusion: Keep More of Your Money with These Deductions
Tax deductions can make a huge difference in your financial picture by reducing the amount of income you have to pay taxes on. Many taxpayers miss out on deductions they didn’t even know existed. By staying informed and taking advantage of all available deductions, you can keep more money in your pocket and make tax season a little less painful.
When it comes to taxes, knowledge is power—and now you have the tools to claim what’s rightfully yours.