If you had big expenses this year, itemizing could be a smart move. It allows you to list specific deductible expenses instead of taking the standard deduction. It’s a bit more work, but the potential savings can be well worth it. To help you get started, here are 10 deductions that might lead to serious savings.
Mortgage Interest You Paid
Paying interest on your home loan might actually work in your favor during tax season. If you bought your home after 2017, you can usually subtract interest on loans up to $750,000. This can make a real difference for homeowners with larger mortgages.
Charitable Donations To Qualified Organizations
Turns out, tax forms are actually quite fond of generosity. When you donate to a recognized nonprofit, you may be able to deduct up to 60% of your income. The trick is keeping records. For donations of $250 or more, you’ll just need a receipt—otherwise, the IRS won’t count it.
Medical Expenses Over 7.5% Of Income
Not all medical expenses are deductible, but the ones that exceed 7.5% of your adjusted gross income might qualify. That means if your costs were unusually high, you could claim the difference. Covered expenses include surgeries, dental work, and even long-term care.
Educator Expenses For Classroom Supplies
There is no shortage of things teachers take on, and classroom expenses are just part of the job. For those in K–12 schools, tax season offers a small thank-you in return. Up to $300 spent on supplies can be deducted, and claiming it is easy since no itemizing is required.
Private Mortgage Insurance (PMI) Premiums
PMI doesn’t exactly win popularity contests, though it does show up with a small perk. Homeowners with loans from 2006 or later may qualify for a deduction on their premiums, which gradually disappears as income rises above $100,000. Additionally, Form 1098 totals simplify paperwork—one less thing to worry about.
Investment Interest On Loans Used To Buy Assets
Thinking about investing with borrowed money? Here’s the playful twist: not all interest is created equal when it comes to tax breaks. In fact, interest paid on investment loans might be deductible, but only up to your net investment income. That limit matters, since deductions generally favor actively managed portfolios.
Home Office Expenses For Self-Employed Filers
If you freelance or run your own business, this could be for you. When your home includes a space used exclusively for work, it may be recognized as a deductible expense. Interestingly, the National Association for the Self-Employed says the $5 per sq. ft. simplified claim can yield significant tax savings.
Unreimbursed Job-Related Expenses (Certain Jobs Only)
Before 2017, lots of employees could write off unreimbursed job costs. Then came the Tax Cuts and Jobs Act, which narrowed things big time. Now, only a few groups, like performing artists and military reservists, still qualify. Even then, their out-of-pocket costs must top 2% of their adjusted gross income.
Medical Travel And Lodging Costs
A medical trip is hardly a vacation, and the IRS happens to notice. Travel for medical reasons might make certain costs deductible, from lodging up to $50 per night to airfare and parking. What matters most is documentation, so hang on to your receipts and jot down where you went and why.
Casualty And Theft Losses In Disaster Zones
Federally declared disasters can turn lives upside down, but the IRS sometimes helps soften the hit. Property damage from major events like hurricanes or floods may qualify for a deduction. To get there, the National Taxpayer Advocate recommends filing Form 4684 and keeping clear records.
