20 Common Tax Deductions Most People Forget to Claim

Tax season can be stressful, but missing out on deductions makes it even worse. Many people forget about everyday expenses that qualify for tax write-offs, from home office costs to student loan interest. Knowing these 20 commonly overlooked deductions could put extra cash back in your pocket.

1. Home Office Deduction

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If you work from home, you can deduct a portion of your rent, utilities, and internet costs. The space must be used exclusively for work, so your kitchen table does not count. Even small home offices can qualify, saving you hundreds of dollars. Keep records of your expenses to avoid any IRS headaches.

2. Student Loan Interest

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Paying off student loans is painful, but at least the interest is deductible. You can claim up to $2,500, even if your parents or someone else made the payments for you. This deduction applies even if you do not itemize, making it a no-brainer. Check your loan statements for the total interest paid.

3. Medical Expenses

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If your medical costs exceed 7.5% of your income, you can write them off. This includes doctor visits, prescriptions, and even some travel expenses for medical care. Many people forget to add things like dental work and mental health therapy. Save every receipt because those bills add up fast.

4. Charitable Contributions

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Donating to charity does not just make you feel good—it can lower your tax bill, too. Even small donations, like clothes or canned goods, count if you get a receipt. If you volunteer, you can also deduct travel expenses like gas and parking. However, do not try to claim your time because the IRS is not that generous.

5. State Sales Tax

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If you live in a state with no income tax, you can deduct sales tax instead. This is great for big purchases like cars, appliances, or home renovations. The IRS offers a standard deduction, but keeping receipts may get you a bigger write-off. This is an easy way to save money if you spent big last year.

6. Job Search Expenses

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Looking for a new job is tough, but at least some expenses can be deducted. Things like résumé services, career coaching, and even travel for interviews may qualify. The job must be in your current field, so switching from teaching to tech will not count. Keep proof of all costs in case the IRS asks.

7. Self-Employment Expenses

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Freelancers and small business owners can deduct tons of expenses, from advertising to office supplies. Even coffee shop meetings and business meals qualify if you keep records. The key is separating personal and business expenses to avoid trouble. A dedicated business account makes this easier.

8. Moving Expenses for Work

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If you moved for a new job, you may be able to deduct moving costs. The move must be at least 50 miles away from your old home, and the job must last at least 39 weeks. Expenses like packing, shipping, and travel can add up fast. This deduction is mostly for military members now, but check if you qualify.

9. Childcare Costs

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Parents can get a break from daycare, babysitters, and even summer camp. The Child and Dependent Care Credit can cover up to 35% of childcare expenses. The provider must be legit—paying your neighbor’s teenager under the table will not work. Make sure to get their tax ID for your records.

10. Teacher Expenses

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Teachers spend their own money on supplies, and the IRS offers a small but helpful deduction. Educators can deduct up to $300 for classroom materials, from books to markers. This is available even if they do not itemize. If they spend more, extra expenses may be deductible under work-related expenses.

11. Mortgage Interest

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Owning a home comes with tax perks, and mortgage interest is one of the biggest. Homeowners can deduct interest on loans up to $750,000. This can lead to major savings, especially in the early years of a mortgage. Check Form 1098 from your lender for the exact amount.

12. State and Local Taxes (SALT Deduction)

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You can deduct up to $10,000 in state and local taxes, including property and income taxes. This is especially useful in high-tax states like California and New York. The limit applies to both single and married filers, so plan accordingly. If you pay a lot in taxes, this deduction is a must.

13. Gambling Losses

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If you tried your luck and lost, at least you can get some of it back on your taxes. Gambling losses are deductible but only up to the amount of your winnings. You will need proof, so keep those casino receipts and lottery tickets. No winnings, no deduction—it is the IRS’s way of keeping things fair.

14. Energy-Efficient Home Improvements

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Upgrading your home to be more energy-efficient can come with tax credits. Things like solar panels, new windows, and insulation can qualify. The credits vary, so check the latest IRS guidelines for exact amounts. Saving on taxes while lowering energy bills is a double win.

15. Baggage Fees and Travel Costs for Work

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Frequent business travelers can deduct baggage fees, hotel stays, and even dry cleaning. The key is that the travel must be work-related, not a disguised vacation. Keeping detailed records and receipts is crucial. If your company reimburses you, do not try to double-dip.

16. Union Dues and Professional Fees

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If your job requires union membership, licensing fees, or professional subscriptions, these costs may be deductible. This applies to industries like teaching, law, and healthcare. The expenses must be necessary for your work and not reimbursed by your employer. Keep all receipts because these deductions add up.

17. Alimony Payments

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If you pay alimony under a divorce agreement made before 2019, you can deduct it. The payments must be made in cash and follow a court order. Child support does not count, so do not try to sneak it in. If you receive alimony, remember that it is taxable income.

18. Casualty and Theft Losses

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If your home or car was damaged in a disaster, you can deduct the loss. This applies only to federally declared disasters, so check the list before filing. Insurance payouts reduce the deduction, but uninsured losses can still be claimed. Theft losses may also qualify if you have solid documentation.

19. Adoption Expenses

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Adopting a child is expensive, but tax credits can help. You can claim up to $15,000 in adoption-related expenses, including legal fees and travel costs. The credit phases out at higher incomes, so check if you qualify. This is one of the biggest family-related tax breaks available.

20. Hobby Expenses

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If you make money from a hobby, you can deduct expenses up to your earnings. This is useful for side gigs that do not qualify as a business. Keep records to prove that your expenses are legit. The IRS loves to challenge these claims, so be prepared.

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