Top 5 Overlooked IRS Tax Deductions

Tax Deductions

Most Overlooked IRS Tax Deductions

If you are like many taxpayers you are always looking to uncover tax deductions that will help lower your tax liability. It is a treasure hunt in essence to find those buried treasures of overlooked tax deductions.

Here is our list of the top 5 most overlooked tax deductions. We hope that you will find them of benefit and put some extra money back into your pocket.

  1. State Sales Taxes: Taxpayers have the option between deducting state and local income taxes as an itemized deduction. But what if you have no state or local income taxes? You can then choose to deduct state sales taxes – you have the option between deducting “actual” sales taxes paid or utilizing the standard sales tax deduction available from published IRS tables. If you purchased a car, boat or airplane, you can increase the standard sales tax deduction by the “actual” sales tax paid on these big purchase items.
  2. Charitable Contributions: It’s not easy to forget donations made to Goodwill, cash donated to your church, etc. However, most taxpayers overlook charitable donations that are made via paycheck deduction, such as to the United Way, and more. These are If you are like many taxpayers you are always looking to uncover tax deductions that will help lower your tax liability. It is a treasure hunt in essence to find those buried treasures of overlooked tax deductions as well. In addition, miles driven for charity, such as to donate your time at events, etc. are deductible as well at a standard deduction rate of 14 cents (for tax year 2015).
  3. Student Loan Interest: Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. However, if your income is below qualified thresholds, there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. The student loan interest deduction is claimed as an adjustment to income. This means you can claim this deduction even if you do not itemize deductions on Schedule A .
  4. Other State Taxes Paid During The Tax Year: Did you owe taxes on your state income tax return for last year and pay them during the current tax year. If so, you can include that amount in your state taxes paid as part of your itemized deductions.
  5. Moving Expenses: If you moved due to a change in your job or business location, or because you started a new job or business, you may be able to deduct your reasonable moving expenses but not any expenses for meals. You can deduct your moving expenses if you meet all three of the following requirements:
    • Your move closely relates to the start of work
    • You meet the distance test
    • You meet the time test


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Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid and to learn more about tax deductions and other tax code areas that are unknown.

When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).

Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.

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