Taxes aren’t exactly fun, but who doesn’t love keeping more of their hard-earned cash? The thing is, most people miss out on perfectly legal ways to shrink their tax bill simply because they don’t know about them. Don’t let that be you. Here are some of the most overlooked tax loopholes and deductions that could save you money.
The Side Hustle Write-Off
If you have a side gig—whether it’s freelancing, selling on Etsy, or driving for a rideshare service—you can deduct a bunch of expenses. Internet bills, office supplies, even part of your rent (if you have a home office) can all count. Just make sure you’re keeping good records in case the IRS comes knocking.
Student Loan Interest Deduction (Even If You Don’t Pay It)
Yes, you can deduct up to $2,500 in student loan interest—even if someone else, like your parents, is making the payments. As long as you’re the one legally responsible for the loan, the IRS considers those payments a gift and lets you claim the deduction.
The Moving Expense Loophole (For Military Members)
Most people lost the ability to deduct moving expenses, but if you’re active-duty military and relocating for a new station, you can still write off the costs. That includes packing, travel, and even storage fees.
Health Savings Account Perks
If you have a high-deductible health plan, an HSA is basically a tax-free piggy bank for medical expenses. Contributions lower your taxable income, and withdrawals for medical costs aren’t taxed either. Plus, the money rolls over year to year, so you don’t have to rush to spend it.
The Savers Credit (Free Money for Retirement Contributions)
If you’re making contributions to an IRA or 401(k) and your income isn’t sky-high, you might qualify for the Saver’s Credit. It’s basically a tax credit just for saving for retirement, and credits reduce your tax bill dollar-for-dollar. It’s like getting paid to plan for the future.
State Sales Tax Deduction (If You Itemize)
If you live in a state with no income tax, don’t forget you can deduct state sales taxes instead. The IRS even has a handy calculator to estimate your deduction, but if you made a big purchase (like a car or furniture), you can add those receipts in, too.
The Child and Dependent Care Credit
If you pay for daycare, summer camp, or after-school care so you can work, you might qualify for this credit. Unlike a deduction, which just lowers taxable income, a credit reduces what you owe dollar-for-dollar. So, it’s basically free money back in your pocket.
The Home Office Deduction (Yes, You Might Qualify)
Even if you don’t own a business, you might still qualify for this deduction if you work from home as a freelancer or contractor. The key is that your workspace needs to be used exclusively for work. If your laptop lives on the kitchen table, sorry, no dice—but a dedicated corner in your living room might count.
Tax Breaks for Teachers
Teachers who shell out their own money for classroom supplies can deduct up to $300 of those expenses. This applies even if they don’t itemize deductions, which makes it one of the easiest breaks to claim.
Energy-Efficient Home Upgrades
Installing solar panels, energy-efficient windows, or even a new insulation system? You might qualify for tax credits that can shave a chunk off your tax bill. The rules change often, so check what’s eligible before filing.
Taxes don’t have to be a total headache. With a little know-how, you can take advantage of deductions and loopholes that put money back in your pocket. Just remember to keep records and play by the rules—because no one wants a surprise letter from the IRS!
