Top 22 Hidden Tax Benefits You Might Be Missing

Many taxpayers overlook potential deductions that could lower their tax bills. The IRS admits that many individuals overpay taxes due to missed write-offs. Here are 22 often neglected tax benefits that can help maximize your return.

State Sales Tax Deduction: Especially beneficial for residents in states without income taxes, this allows you to choose between deducting sales tax or income tax, based on which provides a greater benefit. The IRS provides guidelines on applicable amounts.

Charitable Contributions: Out-of-pocket expenses such as donations made during volunteering or fundraising efforts can be deductible. Items like purchased stamps or ingredients for charity meals qualify as charitable deductions.

Job Search Expenses: Costs for travel, lodging, transportation, resume printing, or employment agency fees can be deducted if you itemize deductions.

Military Reserve Travel Claims: Reservists traveling over 100 miles away from home overnight for drills or meetings can deduct travel expenses related to their military duties.

Childcare Costs Credit: You might qualify for a credit covering 20-35% of childcare expenses while working. Employer-sponsored reimbursement accounts could provide additional benefits.

Previous Year State Tax Payments: Including last year's state taxes paid or owed can be beneficial when filing federal returns, alongside withholding details.

Jury Duty Income: If you received your regular salary while serving, you can report and deduct that amount as part of your income adjustments.

Lifetime Learning Credit: Even if you've completed college, this credit can offset the costs of ongoing education and courses.

Bonus Depreciation: Business owners can fully expense qualifying assets in the year they are put into use, reducing taxable income.

Older Taxpayers’ Penalty Relief: Those aged 62 and above can request penalty waivers using Form 2210 if owing over $1,000, easing tax burdens.

Attorney Fees for Alimony: Legal fees related to establishing or modifying alimony arrangements and associated tax advice may be deductible if they exceed 2% of adjusted gross income.

Related Reads: 10 Best States for Tax Savings

Additional overlooked deductions include reinvested dividends attribution, student loan interest paid by parents, subscriptions to professional journals, Medicare premiums for self-employed individuals, and estate tax paid on IRA assets. Mortgage points, baggage fees, Social Security taxes, bond premiums, and hospital charges are also deductible. The American Opportunity Tax Credit offers up to $2,500 annually, further reducing tax liabilities.

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