Essential Tax Deductions You May Be Overlooking

2 January 2026

Tax season can feel like a puzzle with too many missing pieces. No matter how careful you are, there’s always that nagging feeling—you might be leaving money on the table. The reality? Many people miss out on valuable tax deductions simply because they don’t know they exist.

Whether you’re filing for the first time or a seasoned pro, it’s easy to overlook some deductions that could save you hundreds or even thousands of dollars. So, let’s dive in and make sure you’re not paying more than you owe.

1. State Sales Tax

If you live in a state with no income tax, this one’s a game-changer. The IRS lets you deduct state and local sales tax instead of state income tax, but many people forget about it.

Did you make a big purchase last year—like a car, boat, or home renovation? You may be able to deduct the sales tax from those purchases. Even smaller day-to-day purchases add up. Keep those receipts or use IRS tables to estimate your deduction.

2. Student Loan Interest (Even If You Didn’t Pay It)

Most people know they can deduct student loan interest, but did you know that even if someone else (like your parents) paid your loans, you might still be able to claim the deduction?

Here’s how it works: if your parents made payments on your student loan, the IRS treats it as if they gave you the money and you paid it yourself. That means you can deduct up to $2,500 in interest—if you qualify based on your income.

3. Job Search Expenses

Were you job-hunting last year? If so, some of those expenses might be deductible—especially if you were looking for a position in the same field.

Things like:
- Resume preparation
- Travel costs for interviews
- Employment agency fees

These deductions can add up quickly. However, there’s a catch—you can only claim these expenses if they exceed 2% of your adjusted gross income.

4. Home Office Deduction

Working from home? You might be sitting on one of the most overlooked deductions. If you use part of your home exclusively for work, you may qualify.

You can calculate this one in two ways:
1. Simplified Method – $5 per square foot (up to 300 square feet).
2. Actual Expense Method – A portion of rent, utilities, and maintenance costs based on the percentage of your home used for business.

A lot of people shy away from this one because they fear an audit. But if you legitimately qualify, you shouldn’t hesitate to claim it.

5. Medical and Dental Expenses

Medical bills can be painful—both physically and financially. But if your medical expenses exceed 7.5% of your adjusted gross income, you can deduct the amount above that threshold.

This isn’t just for doctor visits. Many people overlook expenses like:
- Prescription medications
- Dental work
- Eyeglasses and contact lenses
- Travel costs for medical appointments
- Therapy or chiropractic care

Don’t forget alternative treatments like acupuncture if they were medically necessary.

6. Charitable Contributions (Even Small Ones)

You probably remember to deduct large charitable donations, but what about the little ones?

Things like:
- Out-of-pocket costs for charity work (gas money for driving to a volunteer event)
- Non-cash donations like clothes, furniture, or electronics
- Mileage driven for volunteer work (14 cents per mile)

Every bit counts, and these deductions can quickly add up!

7. Educator Expenses (Even if You’re Not a Teacher)

Teachers can deduct up to $300 for classroom supplies, but did you know certain educators, counselors, and instructors may also qualify? If you spent money on books, supplies, or technology for your students, you can claim this deduction—even if you weren’t reimbursed.

8. Jury Duty Pay (If You Had to Give It to Your Employer)

If your employer required you to hand over your jury duty pay, you can still deduct the amount from your taxable income. It’s a small deduction, but why give up free tax savings?

9. Dependent Care Credit for Summer Camps

Thinking about enrolling your child in a summer camp? Good news—it might be deductible!

The Child and Dependent Care Credit allows you to deduct the cost of day camps (but not overnight camps). If you’re working or looking for work and need child care, this could put money back in your pocket.

10. Moving Expenses for Military Members

If you’re an active-duty military member and had to relocate for service, you can deduct many moving costs, including:
- Travel expenses
- Shipping household goods
- Storage fees

Civilians used to be able to claim moving expenses as well, but the 2018 tax law eliminated this benefit for most taxpayers.

11. Self-Employment Tax Deduction

Self-employed individuals pay both the employee and employer portions of Social Security and Medicare. The good news? You can deduct the employer portion (half of your self-employment tax).

This isn’t a business deduction—it directly reduces your adjusted gross income, making it a powerful tax-saving tool.

12. Credit Card & Loan Interest for Business Expenses

If you use a credit card or take out a loan for your business, that interest is deductible. Even if you use your personal credit card but the expense was 100% business-related, you can still write off the interest.

13. State Tax Refund (When It’s Taxable)

If you received a state tax refund last year, it might be taxable—but only if you claimed a deduction for state taxes paid. If you didn’t itemize deductions in the prior year, your state tax refund may not be taxable at all.

Make sure you’re not mistakenly reporting income that doesn’t need to be taxed!

14. Casualty & Theft Losses (If You Qualify)

If you suffered damage from a natural disaster, fire, or theft, the IRS may allow you to deduct uninsured losses. However, due to recent tax law changes, this deduction is typically only available for federally declared disaster areas.

If this applies to you, it’s worth looking into!

15. Baggage Fees & Travel Expenses for Work

Did you travel for work and weren’t reimbursed? Things like baggage fees, transportation, and lodging could be deductible—especially if you’re self-employed or a business owner.

Final Thoughts: Don’t Leave Money on the Table

Taxes are complicated, and it’s understandable why so many deductions go unnoticed. But now that you're aware of these commonly overlooked tax breaks, you can take full advantage of them.

Remember, every deduction counts. Even small ones add up, and they could mean the difference between a hefty bill and a nice refund. So, before you file, go through your expenses carefully and make sure you’re claiming everything you’re entitled to.

And if you’re ever unsure? A tax professional can help ensure you’re not missing out on savings that belong in your pocket—not Uncle Sam’s.