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Common Tax Deductions You Might Be Missing
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1. Mortgage Interest & Property Taxes
If you own a home, the mortgage interest deduction is one of the most valuable benefits of itemizing. You can deduct interest on up to $750,000 of qualified home loans (or $1 million if the mortgage was taken out before December 16, 2017).
Homeowners also often overlook the State and Local Tax (SALT) deduction, which allows a combined deduction of up to $10,000 for property taxes and state/local income or sales taxes. [aol.com] [nationalta...eports.com]
2. Medical & Dental Expenses
If your out?of?pocket medical and dental expenses exceed 7.5% of your adjusted gross income, you may deduct the amount above that threshold—provided you itemize.
Eligible expenses can include doctor visits, hospital care, prescriptions, insurance premiums, and certain long?term care costs. [nationalta...eports.com]
3. Charitable Contributions
Donations to qualified charities—cash or non?cash—can be deducted if you itemize your return. Be sure to keep receipts and documentation, especially for large gifts. [nationalta...eports.com]
4. Student Loan Interest
You may deduct up to $2,500 in student loan interest each year as an above?the?line deduction, even if you don’t itemize. This deduction also reduces your adjusted gross income (AGI), which may help you qualify for other tax benefits. [aol.com]
5. Retirement Contributions (IRA & HSA)
Contributions to a traditional IRA or Health Savings Account (HSA) may be tax?deductible depending on your income and eligibility. These deductions are often overlooked but can significantly reduce taxable income. [aol.com]
6. Home Office Deduction for the Self?Employed
If you’re self?employed and use part of your home regularly and exclusively for business, you may be eligible for a home office deduction. This can include a portion of utilities, rent, mortgage interest, and more. [aol.com]
7. New & Expanded Deductions for 2025–2026
Recent tax law changes have added or expanded several deductions—some taxpayers may not realize these are now available:
- Tip Income Deduction (2025–2028)
- Eligible workers in IRS?listed tipped occupations may deduct up to $25,000 in qualified tips per year, subject to income limits. [mensjournal.com]
- Overtime Pay Deduction (2025–2028)
- Individuals may deduct the overtime “premium” portion (the extra half of “time?and?a?half”) up to $12,500 for single filers or $25,000 for joint filers. [mensjournal.com]
- Car Loan Interest Deduction
- Interest paid on loans for new American?made vehicles purchased after December 31, 2024, may be deducted up to $10,000. [mensjournal.com]
- Enhanced Senior Deduction
- Beginning in 2025, taxpayers age 65+ may qualify for an additional $6,000 deduction (or $12,000 for married couples if both are eligible), separate from the standard deduction. [mensjournal.com]
- Rising Standard Deductions (2025–2026)
- Standard deduction amounts continue to increase with inflation. For example:
- 2025 single filers: $15,750
- 2025 married filing jointly: $31,500
- 2025 head of household: $23,625 [mensjournal.com]
- Standard deduction amounts continue to increase with inflation. For example:
These adjustments may make the standard deduction more advantageous than itemizing for many taxpayers.
8. Investment Interest Expense
If you borrow money to invest in taxable investments, you may deduct interest paid—up to the amount of your net investment income. [nationalta...eports.com]
Conclusion
Understanding which deductions you qualify for—especially with recent changes—can make a meaningful difference in your tax bill. Whether you itemize or take the standard deduction, reviewing potential savings can help you get the most from your tax return.
As your credit union, we’re committed to helping you feel confident and informed in your financial decisions. If you’d like help preparing financially for tax season, reach out to us—we’re here to support your financial well?being.
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