Paying taxes is a fact of life, but that doesn’t mean you have to pay more than your fair share. Every year, millions of Americans leave money on the table by missing out on hidden tax breaks. Even if you work with a CPA, some deductions and credits can slip through the cracks, especially the lesser-known ones. The tax code is complicated, and it’s easy to overlook opportunities that could put extra cash back in your pocket. It pays to know about these hidden tax breaks if you want to maximize your refund and minimize your tax bill. Let’s dig into ten overlooked ways to save on your taxes—some of which even the pros might miss.
1. State Sales Tax Deduction
You can deduct state and local sales taxes if you live in a state with no income tax. But even if your state does have income tax, you can choose whichever deduction is higher. This is especially valuable if you made big purchases, like a car or major appliances, during the year. The IRS provides a handy calculator to estimate your deduction, but don’t forget to add receipts for large, one-time purchases.
2. Out-of-Pocket Charitable Expenses
Most people know you can deduct cash donations to qualified charities, but did you know you can also deduct unreimbursed expenses related to volunteering? This includes mileage driven for charitable work, supplies you purchase for events, and even parking fees. Keep detailed records and receipts, and remember that your time isn’t deductible—but your costs often are. These hidden tax breaks can add up if you’re an active volunteer.
3. Student Loan Interest Paid by Others
If someone else (like a parent) pays your student loan interest, the IRS treats it as if they gave you the money and you paid the interest yourself. That means you can claim up to$2,500 in student loan interest deductions, even if you’re not the one making the payments. This is a little-known benefit for recent grads and their families.
4. Medical Miles and Travel
You probably know you can deduct medical expenses that exceed 7.5% of your adjusted gross income, but did you know you can also deduct travel costs for medical care? This includes mileage to and from appointments, parking, tolls, and even certain lodging expenses if you need to travel for treatment. Track your trips and keep receipts—these hidden tax breaks can make a difference if you have high medical costs.
5. Job Search Expenses
If you’re looking for a new job in your current field, some of your job search expenses may be deductible. This includes resume preparation, travel for interviews, and even career counseling. While the Tax Cuts and Jobs Act suspended this deduction for most taxpayers through 2025, it’s still available for certain groups, such as armed forces members. Always check the latest IRS rules to see if you qualify.
6. Educator Expenses Beyond the Obvious
Teachers can deduct up to $300 for classroom supplies, but many don’t realize that professional development courses, books, and even COVID-19 protective items like masks and sanitizer may also qualify. If you’re an educator, keep receipts for all work-related purchases. These hidden tax breaks can help offset the out-of-pocket costs that come with teaching.
7. Mortgage Points Paid by the Seller
If you bought a home and the seller paid points to lower your mortgage rate, you may be able to deduct those points on your tax return. Many buyers overlook this deduction because they didn’t pay the points directly. Review your closing documents and ask your lender for a breakdown—this hidden tax break can mean significant savings in your first year of homeownership.
8. Retirement Savings Contributions Credit (Saver’s Credit)
If you contribute to a retirement account like a 401(k) or IRA and your income falls below certain thresholds, you may qualify for the Saver’s Credit. This credit can be worth up to $1,000 or $2,000 for married couples. and is in addition to the regular deduction for retirement contributions. Many eligible taxpayers miss this credit entirely.
9. Health Savings Account (HSA) Contributions
Contributions to an HSA are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses. What many people don’t realize is that you can contribute up to the tax filing deadline for the previous year. If you haven’t maxed out your HSA, you still have time to take advantage of this hidden tax break and lower your taxable income.
10. Energy-Efficient Home Improvements
If you made energy-efficient upgrades to your home—like installing solar panels, new windows, or efficient heating and cooling systems—you may qualify for valuable tax credits. These credits can cover a percentage of the cost and are often overlooked, especially if you didn’t mention the improvements to your tax preparer. Save your receipts and check which improvements qualify each year, as the rules and eligible items can change.
Make the Most of Hidden Tax Breaks This Year
The tax code is full of hidden tax breaks that can help you keep more of your money, but you have to know where to look. Even experienced CPAs can miss these opportunities if they don’t bring them up. Take time to review your expenses, keep good records, and ask questions—being proactive can pay off at tax time. You can uncover hidden tax breaks that make a real difference in your financial picture with a little extra effort.
What hidden tax breaks have you found helpful? Share your experiences or questions in the comments below!
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