Discover legitimate tax deductions that many taxpayers overlook, potentially saving thousands on your tax bill.

Tax season is dreaded by many Americans, but what if you're actually leaving money on the table every year? According to IRS data and tax professionals, millions of taxpayers overlook legitimate deductions that could significantly reduce their tax burden. While most people know about common write-offs like mortgage interest and charitable donations, the tax code contains numerous lesser-known deductions that go unclaimed year after year.

Why Tax Deductions Go Unclaimed

The U.S. tax code spans thousands of pages, with complex provisions that even professionals struggle to fully grasp. This complexity means many valuable deductions remain hidden in plain sight. According to a recent survey of CPAs, the average self-filing taxpayer misses between 3-5 legitimate deductions each year.

"Most people using tax software or filing themselves focus only on the most obvious deductions," explains Marilyn Cohen, CPA and tax strategist. "But the tax code is filled with specialized deductions designed for specific situations that the standard questionnaires might not capture."

Here's a look at the most commonly overlooked tax breaks that could potentially save you thousands.

Medical Expenses You Didn't Know Were Deductible

While many taxpayers know they can deduct medical expenses that exceed 7.5% of their adjusted gross income, few realize the extensive range of expenses that qualify as "medical." These often-missed deductions include:

Medical Travel and Transportation

• Mileage driven to and from medical appointments (18 cents per mile for 2022)
• Parking fees and tolls paid at medical facilities
• Public transportation costs to medical appointments
• Airfare and lodging for out-of-town medical treatment
• Meals during inpatient care

Home Modifications for Medical Needs

If you make modifications to your home for medical purposes, these costs may be partially or fully deductible:

• Installing entrance or exit ramps
• Widening doorways and hallways
• Adding railings or support bars
• Modifying kitchen cabinets and equipment for accessibility
• Installing medical alert systems

The key requirement is that these modifications must not add value to your home and must be made primarily for medical care. The cost that exceeds any increase in property value is deductible.

Surprising Medical Deductions

• Weight loss programs (when prescribed for a specific condition like obesity)
• Smoking cessation programs and prescriptions
• Lead paint removal for children with lead poisoning
• Special education tuition for children with learning disabilities
• Special dietary food (the cost that exceeds regular food)
• Air purifiers and air conditioners (when medically necessary)

Education-Related Deductions Beyond Tuition

Education credits like the American Opportunity Credit and Lifetime Learning Credit are relatively well-known, but other education-related tax breaks often go unnoticed:

Student Loan Interest Deduction

You can deduct up to $2,500 in student loan interest, and many taxpayers don't realize:

• You can claim this even if someone else makes payments on your behalf
• Voluntary interest payments during grace periods are also deductible
• This is an "above-the-line" deduction, meaning you can claim it even if you don't itemize

Work-Related Education

Self-employed individuals can deduct education expenses that maintain or improve skills needed in their current business, including:

• Professional development courses
• Seminars and conferences
• Books, journals, and subscriptions related to your field
• Travel expenses related to educational activities

Self-Employment Deductions That Go Unclaimed

With the rise of the gig economy, more Americans are self-employed than ever before, yet many miss these valuable deductions:

Home Office Deduction

The home office deduction is well-known but often underutilized. Beyond the basic square footage calculation, you can deduct:

• A percentage of utilities based on your office's square footage
• Home insurance and security system costs (proportional to office space)
• Depreciation on the business portion of your home
• Home repairs that affect your office space

Vehicle Expenses Beyond Basic Mileage

If you use your vehicle for business, you have two options: the standard mileage rate or actual expenses. When using actual expenses, these often-forgotten costs can be included:

• Garage rent for business vehicles
• Parking fees and tolls for business purposes
• Auto loan interest (the business percentage)
• Personal property taxes on vehicles (the business portion)

Health Insurance Premiums

Self-employed individuals can deduct 100% of health, dental, and long-term care insurance premiums for themselves, spouses, and dependents. This above-the-line deduction is frequently overlooked.

Miscellaneous Deductions You Might Be Missing

Moving Expenses for Military Personnel

While the Tax Cuts and Jobs Act eliminated the moving expense deduction for most people, active-duty military members can still deduct unreimbursed moving costs when relocating due to military orders.

Disaster Losses

If you've suffered losses from a federally declared disaster, you can deduct uninsured or unreimbursed losses. This deduction can be substantial and is available even if you take the standard deduction.

Energy-Efficient Home Improvements

Residential energy efficiency tax credits have been extended and expanded for qualifying improvements like energy-efficient windows, doors, insulation, and certain heating and cooling systems.

Strategies to Maximize Your Deductions

To ensure you're not leaving money on the table this tax season:

1. Keep detailed records throughout the year, especially for medical expenses, business use of your home or vehicle, and charitable contributions
2. Consider professional help for at least one tax year to identify deductions you might be missing
3. Review prior returns - if you've missed significant deductions, you can generally file amended returns for the past three years
4. Use comprehensive tax software that asks detailed questions about your specific situation

While the tax code's complexity may seem daunting, it also creates numerous opportunities to legally reduce your tax burden. Taking the time to identify these hidden deductions can result in substantial savings year after year.