Overlooked Tax Deductions

Tax season can be a stressful time for many people, but it’s also an opportunity to take advantage of all the deductions available to you. While most people are familiar with common deductions such as mortgage interest and charitable contributions, there are many other overlooked deductions that could save you money on your taxes. In this article, we will explore 11 of these lesser-known deductions and provide you with the information you need to maximize your tax savings.

Many people who work from home are eligible for the home office deduction, which allows you to deduct expenses related to the business use of your home. This can include a portion of your mortgage or rent, utilities, and home maintenance costs. To qualify, your home office must be used exclusively and regularly for business purposes.

Teachers and educators can deduct up to $250 of unreimbursed expenses for classroom supplies, materials, and professional development. This deduction can be especially valuable for those who often spend their own money on items for their classrooms.

If you moved for a new job that is at least 50 miles further from your previous home than your old job was, you may be able to deduct certain moving expenses, including the cost of moving your belongings and travel expenses. This deduction is often overlooked but can provide significant tax savings for those who qualify.

Contributions to a Health Savings Account (HSA) are tax-deductible, up to certain limits. If you have an HSA through your high-deductible health plan, be sure to take advantage of this deduction, as it can help lower your taxable income.

If you were searching for a new job in the same line of work, you may be able to deduct certain expenses, such as the cost of résumé preparation, travel to interviews, and job placement agency fees. Keep track of these expenses, as they can add up to a significant deduction.

Individuals who pay alimony to a former spouse may be able to deduct those payments on their tax return. It’s important to note that the recipient of the alimony must report it as income, but the payer can benefit from the tax deduction.

If you experienced a loss due to a casualty or theft, such as property damage from a natural disaster or theft of your personal belongings, you may be able to deduct the unreimbursed amount that exceeds 10% of your adjusted gross income. Be sure to keep documentation of the loss and any insurance reimbursements you received.

If you were paid by your employer while serving jury duty and you were required to give your jury duty pay to your employer, you can deduct that amount from your taxable income. This can help offset the financial burden of serving jury duty.

While it may seem counterintuitive, gambling losses can be deducted if you itemize your deductions. However, the amount of losses cannot exceed the amount of gambling income you report on your tax return. Keeping accurate records of your gambling activity is crucial to substantiating your deductions.

Legal expenses incurred in the course of producing or collecting taxable income, or that are related to the determination, collection, or refund of any tax, can be tax-deductible. This can include fees paid to attorneys for tax advice or assistance with tax-related matters.