Tax season can be stressful, but it doesn’t have to be. Many people leave money on the table every year simply because they aren’t aware of all the deductions and credits available to them. Even small oversights can mean missing out on hundreds, or even thousands, of dollars. Here are a few of the most commonly missed tax deductions:

 

1. State and Local Taxes (SALT)

If you itemize deductions, you can deduct either your state income taxes or your state and local sales taxes. Many taxpayers forget the sales tax option, which can be particularly beneficial if you’ve made big purchases like a car or major home improvements.

• For 2025, the SALT deduction cap is $40,000 per return ($20,000 if married filing separately). The deduction begins to phase out for taxpayers with a modified adjusted gross income (MAGI) over $500,000.

 

2. Student Loan Interest

You can deduct up to $2,500 in student loan interest, even if someone else (like a parent, paid it) provided you are legally responsible for the loan.

• Keep in mind that the deduction phases out for higher-income filers: $80,000–$95,000 for single filers, $165,000–$195,000 for joint filers. Always check IRS Publication 970 for the exact thresholds for the tax year.

 

3. Home Office Deduction

If you’re self-employed or run a small business, your home office could save you money. To qualify:

The space must be used regularly and exclusively for work.

• You can calculate the deduction using the simplified method (fixed rate × square footage) or the actual-expense method (a percentage of home expenses). Note: W-2 employees generally cannot claim this deduction under current law.

 

4. Charitable Contributions

Donating cash is the most obvious way to save, but don’t forget about: Non-cash donations like clothing or household items, and miles driven for volunteer work with qualifying organizations.

• Keep detailed records and receipts, including fair market value for items donated.

 

5. Medical and Dental Expenses

You may be able to deduct qualified medical and dental expenses that exceed 7.5% of your AGI if you itemize.

This includes: Doctor visits and prescriptions, dental and vision care, travel to medical appointments, and home modifications for health reasons.

 

6. IRA Contributions

Even after December 31, you can make contributions for the prior tax year up until the filing deadline in April.

• These contributions may reduce your taxable income if you meet eligibility requirements.

 

7. Educator Expense Deduction

Teachers and eligible school staff can deduct out-of-pocket classroom expenses such as books, supplies, and professional development materials.

 

8. Energy-Efficient Home Improvement Credit

This is a tax credit, not a deduction, meaning it reduces your tax bill directly. 30% of qualifying expenses can be claimed for improvements like insulation, energy-efficient windows, doors, heat pumps, and more. There is an annual limit of $1,200 for most building improvements and $2,000 for certain high-cost items.

• Improvements must be placed in service by December 31, 2025.

 

9. Health Savings Account (HSA) Contributions

If you have a high-deductible health plan the 2025 contribution limit is $4,300 self-only, $8,550 family coverage, and a $1,000 catch-up for age 55+.

• Contributions are tax-deductible, grow tax-free, and withdrawals for qualified medical expenses are tax-free.

 

Tips to Maximize Your Deductions

• Keep detailed records: Receipts, mileage logs, and donation documentation.
• Review IRS updates each year: Thresholds, caps, and credits change regularly.
• Work with a professional: A financial counselor or tax preparer can help you identify deductions you may overlook.

 

How We Help You With Tax Planning

At Walters Financial Wellness, we help clients save money and reduce stress during tax season:

• Tax Review & Optimization: Identify all deductions and credits available to you.
• Year-Round Planning: Make strategic moves to lower taxes before filing.
• Record-Keeping Guidance: Track receipts, mileage, and other deductible expenses efficiently.
• Small Business Support: Home office, business mileage, and freelancer deductions.
• Financial Goal Integration: Combine tax planning with budgeting, investing, and debt management.

Contact us today for a consultation!

 

**Disclaimer: This post is for informational purposes only and reflects IRS rules as of November 2025. Tax laws change; always consult a tax professional for advice tailored to your situation.

 

**Sources

• IRS — Energy Efficient Home Improvement Credit (2025)
• IRS — Energy Efficient Home Improvement FAQs
• CNBC — SALT deduction cap 2025
• IRS Publication 970 — Student Loan Interest Deduction
• IRS Publication 587 — Business Use of Your Home
• IRS Publication 502 — Medical & Dental Expenses
• IRS Publication 969 — HSA Contributions & Limits