Tax season can feel like a maze of rules, but plenty of hidden savings sit quietly in plain sight. Some of the most overlooked deductions could put real money back in your pocket. In this list, we highlight 10 such deductions worth knowing, so you can approach tax time with more awareness.
Home Office Expenses
Even a corner of your living room can count as a workspace if it’s used exclusively for business. That opens the door to deductions on rent and utilities. This also includes part of your internet bill. The IRS even permits a simplified deduction of $5/sqft, with a limit of 300 square feet.
Medical Travel Costs
Parking fees and tolls during medical trips often surprise people when they realize they’re deductible. In 2025, you can claim 21 cents per mile driven for medical purposes. Once total costs exceed 7.5% of adjusted gross income, lodging up to $50 nightly qualifies as well.
Energy-Efficient Home Improvements
All states offer a Residential Clean Energy Credit. Anything from solar panels to wind turbines can return 30% of installation costs, with battery storage included. Renters can also qualify for an exemption if they own the necessary equipment.
Saver’s Credit
Contributing to retirement accounts may offer more than future security—it could reduce today’s tax bill. So, qualifying taxpayers with income under $48,250 single or $76,500 married can claim a credit up to $1,000, or $2,000 jointly. Spousal IRA contributions may count, too, though the credit remains non-refundable.
State Sales Tax
Taxpayers may choose sales tax deductions instead of state income tax when itemizing, which is particularly useful in states with no income tax. Using IRS tables is the simplest route, but keeping receipts for large expenses like a new car or major home project often gives a bigger return.
Self-Employment Health Insurance Premiums
Many freelancers miss this deduction because they assume it’s part of medical expenses. In reality, it’s separate and more generous. You can deduct 100% of health premiums for yourself or dependents, limited only by your business’s net profit—even on a spouse’s plan.
Alimony Payments
Detailed records matter most here, since the IRS watches closely. If your divorce was completed before December 31, 2018, alimony payments reduce taxable income when paid in cash or check. The rule also applies to an ex-spouse overseas, but newer agreements no longer qualify.
Educator Classroom Expenses
Teachers often purchase classroom items with their own money, and the IRS offers limited relief. Eligible staff—such as K-12 teachers, principals, and counselors working 900 hours a year—can claim up to $300 without itemizing. This deduction also covers classroom needs ranging from books to sports gear and art supplies.
Gambling Losses
Losses can soften the tax hit from gambling, but only up to the winnings you report. Careful records are non-negotiable. Casino games qualify, as do online betting platforms. Even the cost of losing lottery tickets may reduce your taxable gambling income.
Moving Expenses For Military
Active-duty service members still qualify for moving deductions when transferred to a new duty station. The rules cover everything from temporary lodging to the cost of shipping belongings. Short-term storage may also apply, and transporting pets is included, giving families extra help during permanent relocations.
