Many taxpayers assume deductions are just mortgage interest and charitable gifts. But several frequently overlooked items can meaningfully reduce your tax bill. Here are top deductions to check before you file.
1. Home Office Deduction
If you use a portion of your home exclusively for business, you may qualify. Tip: measure the workspace and keep utility and repair records.
2. State Sales Taxes (if beneficial)
Taxpayers in states without income tax or with big purchases may benefit from deducting state sales taxes instead of state income taxes.
3. Student Loan Interest & Education Expenses
Interest paid on qualified student loans and certain education costs can reduce your taxable income. Tip: track Form 1098-E and tuition receipts.
4. Out-of-Pocket Job Expenses (limited applicability)
While many unreimbursed employee expenses are limited, certain categories for specific professions or reservists still qualify. Check current IRS rules.
5. Medical & Dental Costs
If medical expenses exceed the AGI threshold in the tax year, you may deduct qualifying costs—keep detailed receipts.
6. Charitable Gifts Beyond Cash
Non-cash donations (clothing, household items) have value—document condition and fair market value.
7. Self-Employment Deductions
Retirement contributions (SEP IRA, Solo 401(k)), health insurance premiums, business mileage, and home office deductions add up.
How to Maximize These Deductions
- Keep organized receipts and digital records.
- Use accounting software for mileage and expense tracking.
- Review annual tax law changes—limits and thresholds change.
- Consult an expert to compare standard deduction vs. itemizing.
Conclusion/CTA
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