Tax season is approaching, and everyone wants to keep more of their hard-earned money. But if you’re only claiming the standard deduction or forgetting about lesser-known tax breaks, you could be leaving thousands on the table. Many Americans miss out on hidden or underused tax deductions simply because they’re not aware of them or assume they don’t qualify. This guide breaks down the top tax deductions you might be missing, so you can pay less tax and secure a bigger refund for 2025.
Let’s make sure you’re not one of the millions shortchanging themselves this year!
Why Tax Deductions Matter
Tax deductions lower your taxable income, which means you could save hundreds or even thousands of dollars each year. Whether you take the standard deduction or choose to itemize, knowing what’s available—and what so many taxpayers forget—can mean real money in your pocket.
Ready to slash your tax bill? Here’s what you may be overlooking.
The Standard Deduction: Who Benefits Most in 2025?
Before diving into itemized or above-the-line deductions, remember that for 2025, the standard deduction amounts have risen again:
- $15,000 for single filers
- $30,000 for married couples filing jointly
- $22,500 for heads of household
If you’re 65 or older, you get an extra boost—up to $21,750 for singles and $43,500 for married couples, thanks to new legislation.
Qualifying for the standard deduction is appealing for many, but don’t assume it’s always better than itemizing. If your deductible expenses (including the ones below) add up to more, itemizing could be the way to go.
Overlooked Itemized Deductions to Maximize Your Tax Refund
1. State and Local Tax (SALT) Deductions
Many taxpayers know they can deduct state income taxes, but not everyone realizes you can also choose to deduct state and local sales taxes instead. This is especially valuable if you purchased a big-ticket item or live in a state with low income tax but high sales tax.
- The cap remains at $10,000 per year for all state and local tax deductions combined.
- Remember to include state income taxes paid the previous spring if you owed on last year’s returns.
2. Medical and Dental Expenses
If you faced hefty out-of-pocket medical or dental bills, you may be able to deduct the portion that exceeds 7.5% of your adjusted gross income. Many people forget this deduction because it can be hard to reach the threshold—but don’t overlook any qualifying expense, including:
- Doctor, dentist, or prescription costs
- Transportation or travel for medical care
- Health insurance premiums (in some cases)
- Home modifications for medical reasons
3. Mortgage Interest (Including Points Paid)
Own a home? You can deduct mortgage interest paid on qualified residence loans up to certain limits. Don’t forget points paid to refinance or purchase your home: these can be deducted over the life of your loan—or, if you paid off your mortgage this year, you can deduct all remaining points at once.
4. Charitable Contributions—Including Small Out-of-Pocket Expenses
You likely remember to deduct large charitable gifts, but did you know you can also claim:
- Smaller, out-of-pocket donations (like supplies purchased for charity events)
- Miles driven for charitable work (14¢ per mile for 2025)
- Checks, payroll deductions, and credit card donations
Track every little expense when you volunteer or donate—receipts add up quickly!
5. Student Loan Interest
Many Americans are repaying student debt, but not all claim the deduction for interest paid on qualified student loans. You can deduct up to $2,500, and this “above-the-line” write-off is available whether or not you itemize.
If someone else is paying your student loans, you may be entitled to this deduction as long as you are the responsible borrower.
6. IRA Contributions and Retirement Savings
Contributions to a traditional IRA, 401(k), or other retirement plans are often missed, especially for those contributing late in the tax year or after, but before the tax deadline. For 2025:
- IRA contribution limit: $7,000 ($8,000 if age 50+)
- Deductions may phase out at higher income levels
- Some programs even allow you to claim a “Saver’s Credit” on top of your deduction
Funding traditional retirement accounts both reduces your taxable income and helps you plan for the future.
7. Out-of-Pocket Teacher and Educator Expenses
If you’re a teacher, counselor, principal, or classroom aide, you can deduct up to $300 (or $600 if you’re married and both spouses are eligible educators) for classroom supplies bought with your own money.
Hang onto those receipts—you earned it!
8. Health Savings Account (HSA) Contributions
If you have a high-deductible health plan, contributions to your HSA are tax-deductible. The limits for 2025 are $4,150 (self-only coverage) and $8,300 (family coverage)—plus $1,000 extra if you’re 55 or older. Contributions can be made up to the tax-filing deadline and are “above-the-line” deductions.
9. Home Office Deduction
Remote work is here to stay, but many still forget to claim the home office deduction. If you’re self-employed and use part of your home regularly and exclusively for work, you can deduct related expenses:
- Proportionate share of mortgage/rent, utilities, insurance
- Repairs and maintenance for your office space
Employees generally no longer qualify, but freelancers and contractors shouldn’t miss this.
10. Investment Interest and Capital Losses
Did you borrow to invest or have investments that lost money? You might qualify for:
- Deductions on interest paid for investment loans
- Capital losses deduction—up to $3,000 in net capital losses annually can offset ordinary income, with remainder carried forward to future tax years
11. Gambling Losses (to the Extent of Your Winnings)
If you enjoyed some luck (or not) at the blackjack table, you can deduct gambling losses—but only up to the amount of reported gambling winnings. This is often neglected, especially by casual bettors.
12. Moving Expenses for Active Military
Although most moving expense deductions are gone, if you’re active-duty military moving due to a transfer, your unreimbursed expenses are still deductible.
13. Jury Duty Pay Passed to Your Employer
If you received jury duty pay but had to hand it over to your employer because they continued to pay your normal wages, you can deduct the full amount. This avoids being taxed on money that didn’t stick around in your bank account.
14. Adoption Credit and Expenses
Adopting a child? The adoption credit for 2025 climbs to $17,280 for qualifying expenses, or higher if adopting a child with special needs. This often goes unclaimed due to lack of awareness or paperwork hassle.
15. Miscellaneous: Deductible Business Expenses (for the Self-Employed)
- Home office, as noted above
- Vehicle expenses (actual costs or IRS standard mileage rate)
- Self-employed health insurance premiums
- Advertising and professional fees
- Continuing education and training
Properly separating personal and business expenses lets you deduct more than you might realize.
Timely New Deductions and Changes for 2025
Big changes are here for 2025, and they could put even more money back in your pocket:
- New bonus deduction for taxpayers age 65+: An additional $6,000 deduction for singles or $12,000 for married couples. This is on top of the already-increased standard deduction.
- Deduction for U.S.-made car loan interest: If you purchased a qualifying U.S.-manufactured vehicle in 2025, check if you can deduct the interest on your auto loan.
- Tip and Overtime Deduction: Qualified workers in tipped professions or who receive overtime may now get extra deductions based on tip and overtime earnings.
- Inflation Adjustments: Many deduction thresholds and IRA/HSA contribution limits have increased—review what’s new each year so you don’t miss out.
Lesser-Known Deductions to Check Before Filing
Besides the big items, don’t ignore smaller or specialty deductions:
- Reinvested dividends (to avoid double taxation)
- Energy-efficient home improvements (subject to eligibility and new rules)
- Federal estate tax on certain inherited IRAs or retirement benefits
- Expenses related to supporting a qualifying elderly parent (caregiver costs)
- Impairment-related work expenses for people with disabilities
Conclusion: Leave No Deduction Behind
Effective tax planning isn’t just about knowing the big write-offs—it’s about recognizing all the opportunities, big and small, to lower your taxable income. Every dollar deducted is a dollar you don’t pay tax on. Review your expenses, keep good records, and revisit this checklist before hitting submit on your 2025 tax return.
Your Next Step
Don’t leave money on the table this year. Use a trustworthy tax software or speak with a tax professional to be sure you’re claiming every deduction you deserve. Doing so could mean a bigger refund, less stress, and more peace of mind.
Take action today—review your financial records, ask questions, and maximize your tax savings!
Maximize your 2025 refund with these insights. Let your money work harder for you!
