Often overlooked tax deductions include state sales tax (instead of income tax), out-of-pocket charitable volunteer expenses, and 14 cents per mile driven for charity. Other frequently missed items are student loan interest paid by parents, medical-related travel (22 cents/mile), and refinancing mortgage points.
Overlooking deductions can cause you to overpay your taxes. Congress revamped several key tax breaks in 2017. Pay attention to child care expenses, medical bills, state sales taxes and student loan interest.
The biggest tax mistakes people make include filing late, math errors, incorrect personal info (like Social Security numbers), forgetting deductions/credits (like EITC), misreporting income, not signing forms, and making errors with bank details for direct deposit, all leading to delays, penalties, or missed savings, with using tax software or professionals helping avoid these common pitfalls.
10 Popular Tax Deductions
If you don't itemize, you can still deduct "above-the-line" adjustments to income, such as contributions to a Traditional IRA or Health Savings Account (HSA), student loan interest, educator expenses, self-employment tax, and penalties on early savings withdrawals, which lower your Adjusted Gross Income (AGI) before you take the standard deduction. These deductions reduce your taxable income regardless of whether you itemize or take the standard deduction, helping lower your overall tax bill.
The 10 Most Overlooked Tax Deductions
Wages, dividends, bank interest, and other income received and that was reported on an information return should be entered carefully. This includes any information needed to calculated credits and deductions.
The "$1000 instant tax deduction" refers to a proposed Australian tax policy, specifically from the Albanese Labor government in 2025, allowing eligible workers to claim a flat $1,000 deduction for work-related expenses without needing receipts, simplifying tax returns for those with lower expenses but potentially costing those with higher expenses, starting from 1 July 2026. It's an option to replace itemised work-related deductions, not an extra refund, and doesn't affect non-work-related deductions like charity.
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10 of the Largest Tax Breaks Explained
Common Tax Deductions You Can Claim Without Receipts
Many business expenses are 100% deductible, including advertising, employee wages, rent, supplies, and certain business meals like company parties or meals for the public, while personal deductions like student loan interest or charitable donations (depending on the type) can also be fully deductible for individuals. The key is that the expense must be "ordinary and necessary" for your trade or business or meet specific IRS criteria, often differentiating from the 50% rule for client meals.
You can write off common expenses like student loan interest, retirement contributions (IRA/401k), self-employed health insurance, and business-related costs (home office, mileage, supplies) if you're an employee or self-employed, but itemizing deductions for things like medical expenses (over 7.5% AGI), mortgage interest, and charitable donations only pays off if it exceeds the Standard Deduction. Self-employed individuals have many more write-offs, including professional dues, business meals, and equipment, but always keep meticulous records.
Avoid These Common Tax Mistakes
Common traps include taxes on Social Security benefits, Medicare surcharges, required minimum distributions (RMDs), real estate sales and estimated quarterly tax payments. With some knowledge, though, you can more effectively steer clear of these potential pitfalls.
What are the most common tax deductions people claim?
The TCJA eliminated deductions for unreimbursed employee expenses, tax preparation fees, and other miscellaneous deductions. It also eliminated the deduction for theft and personal casualty losses, although taxpayers can still claim a deduction for certain casualty losses occurring in federally declared disaster areas.