Commonly Missed
Deductions and credits most people overlook
Are alimony payments tax deductible?
Alimony payments are only tax deductible if your divorce was finalized before January 1, 2019. For divorces finalized after 2018, alimony is neither deductible for the payer nor taxable income for the recipient. This change affects approximately 600,000 divorced Americans annually.
Are HOA fees tax deductible?
HOA fees for your primary residence are generally not tax deductible. However, if you rent out part of your home or use it for business, a portion may be deductible. For a $300/month HOA fee on a rental property, you could deduct the full $3,600 annually.
Are investment advisory fees tax deductible?
Investment advisory fees are generally NOT tax deductible for individual taxpayers as of 2026. The Tax Cuts and Jobs Act eliminated the miscellaneous itemized deduction that previously allowed these fees to be deducted, potentially costing investors thousands in lost tax savings annually.
Can I deduct gambling losses?
Yes, you can deduct gambling losses, but only up to the amount of gambling winnings you report as income, and only if you itemize deductions. For 2026, this means your total itemized deductions must exceed $15,000 (single) or $30,000 (married filing jointly) to benefit from gambling loss deductions.
Can I deduct home improvements on my taxes?
Most home improvements are NOT immediately tax deductible, but they increase your home's cost basis, reducing capital gains taxes when you sell. A $50,000 kitchen renovation won't lower this year's taxes but could save $12,000+ in capital gains taxes at sale (assuming a 24% rate).
Can I deduct IRA contributions?
Yes, you can deduct traditional IRA contributions up to $7,000 in 2026 ($8,000 if 50+), but deductibility phases out based on income and whether you have a workplace retirement plan. For 2026, the phaseout starts at $77,000 for single filers with a 401(k).
Can I deduct job search expenses?
Job search expenses are generally not deductible for employees due to the 2017 Tax Cuts and Jobs Act, which suspended miscellaneous itemized deductions through 2025. However, self-employed individuals can deduct job search costs as business expenses, and some job-related moving expenses may still qualify under specific circumstances.
Can I deduct medical expenses on my taxes?
You can deduct qualifying medical expenses that exceed 7.5% of your adjusted gross income (AGI) when itemizing. For someone earning $60,000, only medical expenses over $4,500 are deductible. This includes insurance premiums, prescriptions, dental, vision, and many treatments not covered by insurance.
Can I deduct moving expenses for a new job?
Most people cannot deduct moving expenses for a new job starting in 2018. The Tax Cuts and Jobs Act suspended this deduction for civilians through 2025, but active-duty military members can still deduct qualifying moves. For most taxpayers, a $3,000 move provides no federal tax deduction, though some states may still allow it.
Can I deduct my home office if I'm a W-2 remote worker?
No, W-2 employees cannot deduct home office expenses from 2018-2025 due to the Tax Cuts and Jobs Act. However, the One Big Beautiful Bill Act restored this deduction starting in 2026, allowing up to $1,500 annually for qualifying home office space used exclusively for work.
Can I deduct my home security system?
Home security systems are generally NOT deductible for personal use, but may qualify if you use your home for business. Home office users can deduct the business percentage (typically 10-20%) of security system costs, potentially saving $120-240 annually on a $1,200 system.
Can I deduct points paid on my mortgage?
Yes, mortgage points are generally tax deductible in the year you pay them if you use the loan to buy or improve your main home. For a $400,000 mortgage, paying 1 point ($4,000) could save you $960-$1,480 in taxes depending on your tax bracket.
Can I deduct property taxes?
Yes, you can deduct property taxes in 2026, but only up to $10,000 total for all state and local taxes combined (property, income, and sales taxes). This cap applies whether you're single or married filing jointly, making it particularly limiting for high-tax areas.
Can I deduct state and local sales tax instead of income tax?
Yes, you can deduct state and local sales tax instead of income tax on your federal return. This saves an average of $1,200 annually for taxpayers in no-income-tax states like Texas and Florida, and can benefit anyone who paid more in sales tax than income tax during the year.
Can I deduct summer camp costs?
You can deduct summer day camp costs through the Child and Dependent Care Credit, but not overnight camps. Day camps for children under 13 qualify for the same 20-35% credit as daycare, potentially saving families $600-$2,100. Sports camps, art camps, and specialty day programs all qualify.
Can I deduct the cost of tax preparation?
Tax preparation fees are generally not deductible for individual returns since 2018. However, business owners can deduct the business portion of tax prep costs, and fees for prior year amendments may qualify. The average taxpayer pays $273 for professional tax preparation but cannot deduct this cost.
Can I deduct union dues on my taxes?
Union dues are no longer deductible for most employees as of 2018. The Tax Cuts and Jobs Act eliminated unreimbursed employee expenses, including union dues, through 2025. However, self-employed individuals can still deduct union dues as business expenses on Schedule C.
Can I deduct unreimbursed employee expenses?
Generally no — the Tax Cuts and Jobs Act eliminated the deduction for unreimbursed employee expenses for most workers through 2025. However, certain professions (military reservists, performing artists, fee-basis officials) can still claim these deductions. The average missed deduction was $3,200 before elimination.
Can I deduct work clothes or uniforms?
You can only deduct work clothes if they're required by your employer AND not suitable for everyday wear. This typically means uniforms, protective gear, or specialized clothing. Regular business attire isn't deductible even if required. Self-employed individuals have more flexibility under business expense rules.
Can I deduct my cell phone bill on my taxes?
You can deduct the business portion of your cell phone bill if you're self-employed or use it for work. W-2 employees generally cannot deduct cell phone costs. Self-employed individuals using their phone 60% for business can deduct 60% of their annual bill—potentially $400-$800 in deductions on a typical $1,200/year phone plan.
Can I deduct charitable donations without itemizing?
For 2026, you generally cannot deduct charitable donations without itemizing, as the temporary above-the-line charitable deduction that allowed up to $300-$600 expired after 2021. However, you can still benefit from charitable giving through tax-advantaged strategies like donor-advised funds, charitable IRA rollovers (if 70½+), and bunching donations in alternating years.
Am I eligible for the Earned Income Tax Credit?
You're eligible for the Earned Income Tax Credit in 2026 if you earned less than $63,398 (married filing jointly with 3+ children) and meet specific requirements. The credit ranges from $600 to $7,430 depending on income and family size, and it's fully refundable even if you owe no taxes.
What is the educator expense deduction?
The educator expense deduction allows eligible teachers, instructors, counselors, and principals to deduct up to $300 per year ($600 if married filing jointly and both spouses are educators) for classroom supplies, books, equipment, and professional development costs. This is an above-the-line deduction, meaning you can claim it even if you take the standard deduction.
What energy efficiency tax credits can I claim in 2026?
In 2026, you can claim up to $3,200 annually in residential energy efficiency tax credits for heat pumps, water heaters, insulation, and other qualifying improvements. Additionally, solar panels and battery storage qualify for a 30% federal tax credit with no annual cap through 2032.
Is health insurance premiums tax deductible?
Health insurance premiums are tax deductible in specific situations: self-employed individuals can deduct 100% of premiums as an above-the-line deduction, while W-2 employees can only deduct premiums that exceed 7.5% of their adjusted gross income when itemizing. In 2026, this could save self-employed taxpayers $1,200-$4,800 annually.
Is my car registration fee tax deductible?
Car registration fees are only tax deductible if you itemize deductions and the fee is based on your vehicle's value. Most flat-fee registrations aren't deductible, but value-based fees (like $50 per $1,000 of car value) qualify as personal property tax, potentially saving you $12-37 per $100 deducted depending on your tax bracket.
Is daycare tax deductible?
Yes, daycare is tax deductible through the Child and Dependent Care Credit. You can claim up to $3,000 in expenses for one child or $6,000 for two or more children under 13. The credit ranges from 20-35% of expenses, saving families $600-$2,100 annually depending on income.
Is mortgage interest still deductible in 2026?
Yes, mortgage interest remains deductible in 2026, but only on the first $750,000 of mortgage debt for loans originated after December 15, 2017. For loans before this date, the $1 million limit still applies. You must itemize deductions to claim it.
Is my gym membership tax deductible?
Generally no — gym memberships are personal expenses and not tax deductible. However, specific exceptions exist: medical necessity (with doctor's prescription), business use for fitness professionals, or HSA eligibility in rare cases. Only 2-3% of gym membership costs qualify for any tax benefit.
Is my HSA contribution tax deductible?
Yes, HSA contributions are tax deductible up to $4,300 for self-only coverage or $8,550 for family coverage in 2026. HSA contributions reduce your taxable income dollar-for-dollar, saving the average taxpayer $946-1,879 annually in federal taxes depending on coverage type and tax bracket.
Is PMI (private mortgage insurance) tax deductible?
PMI is tax deductible for 2026 if your adjusted gross income is under $109,000 (or $54,500 if married filing separately). The deduction phases out completely at AGI of $109,000+. Average PMI costs $1,200-$3,000 annually, potentially saving $288-$1,110 in taxes.
Is theft or casualty loss tax deductible?
Theft and casualty losses are deductible only if they exceed 10% of your adjusted gross income plus $100 per incident. For someone earning $60,000, losses must exceed $6,100 to qualify. The deduction is limited to itemized filers and requires detailed documentation.
Is student loan interest tax deductible?
Yes, you can deduct up to $2,500 of student loan interest annually as an above-the-line deduction, reducing your AGI dollar-for-dollar. The deduction phases out for single filers earning $75,000-$90,000 and married couples earning $155,000-$185,000 (2026 limits).
What tax deductions can I claim for my children?
Parents can claim several child-related deductions beyond the Child Tax Credit: up to $8,000 in dependent care expenses, education costs, medical expenses over 7.5% of income, and adoption expenses up to $16,810 per child in 2026.
What home repairs are tax deductible?
Most home repairs aren't tax deductible unless you use part of your home for business. However, repairs made to rental property or a home office are 100% deductible. Home improvements add to your cost basis, reducing capital gains when you sell (average tax savings: $2,000-$5,000).
What is the child and dependent care credit?
The Child and Dependent Care Credit gives you 20-35% of qualifying childcare expenses back as a tax credit, up to $3,000 for one child or $6,000 for two or more children. For a family spending $5,000 on daycare with $50,000 income, this credit saves $1,050 in taxes.
What's the SALT deduction and is it still capped?
The SALT deduction lets you deduct state and local taxes paid, but it's capped at $10,000 through 2025. This includes property taxes plus either income taxes OR sales taxes. For 2026, the cap expires and reverts to unlimited deductions, potentially saving high-tax state residents thousands.
What is the Saver's Credit and do I qualify?
The Saver's Credit reduces your tax bill by 10%, 20%, or 50% of retirement contributions up to $2,000 ($4,000 if married). For 2026, single filers with income under $38,250 qualify, with the full 50% credit available for incomes under $23,250. This credit can be worth up to $1,000 for singles or $2,000 for couples.
What moving expenses are deductible for military?
Active duty military members can still deduct unreimbursed moving expenses for PCS moves, while civilians cannot (except certain situations). Military families can deduct costs like travel, lodging, and moving household goods, potentially saving $1,000-3,000 per PCS move depending on distance and expenses.
What tax deductions do most people miss?
Most taxpayers miss educator expenses ($300), state tax payments, charitable contributions under $250, student loan interest, and job search costs. The IRS estimates 25% of eligible taxpayers miss the student loan interest deduction alone, worth up to $2,500 annually.