Each tax season brings changes that can quietly affect how much you owe or how much you keep. Many deductions aren’t obvious, and some only apply if they’re reported and calculated correctly. That’s why understanding what’s available is important, but having your return prepared with care matters just as much.
Below are several deductions taxpayers often don’t realize may apply this tax season.
1. Overtime Deduction (New)
One of the most talked-about changes this tax season is the new deduction for qualified overtime compensation.
This deduction allows eligible workers to reduce taxable income based on the overtime premium portion of their pay — the difference between regular pay and overtime pay. It does not eliminate payroll taxes and is subject to income limits and annual caps.
This deduction is claimed when filing your tax return, not on your paycheck.
IRS guidance on overtime and other worker deductions:
https://www.irs.gov/newsroom/how-to-take-advantage-of-no-tax-on-tips-and-overtime
2. Tip Income Deduction (New)
Certain workers who receive tips may be eligible to deduct qualified tip income up to annual limits.
While tips must still be reported as income, this deduction can reduce taxable income for eligible taxpayers. Income thresholds and filing requirements apply.
This change has been widely discussed online, but the deduction rules are more specific than many headlines suggest.
3. Educator Expense Deduction (Often Overlooked)
Eligible educators may deduct qualified classroom expenses they paid out of pocket, even if they take the standard deduction.
This includes items such as classroom supplies, books, and certain educational materials. Many teachers miss this deduction because it is relatively modest but still meaningful.
4. Health Savings Account (HSA) Contributions Made Outside Payroll
If you contributed to a Health Savings Account (HSA) outside of payroll deductions, those contributions may still be deductible.
This is commonly overlooked when contributions are made directly rather than through an employer, especially near the tax filing deadline.
5. Student Loan Interest Deduction
Taxpayers who paid interest on qualified student loans may be able to deduct student loan interest, even if they don’t itemize deductions.
Income limits apply, and eligibility depends on filing status, but this remains one of the most commonly missed deductions.
6. Self-Employment Expenses (Expanded Awareness)
Self-employed individuals often miss deductions related to:
- Business mileage
- Home office use
- Software and professional services
- Business insurance
While these deductions are not new, increased gig and contract work has made them more relevant this tax season.
7. Retirement Contributions Made Before the Filing Deadline
Certain retirement contributions made before the tax filing deadline may still count toward the prior tax year.
This deduction is often missed by taxpayers who assume contributions only count if made during the calendar year.
8. Energy-Efficient Home Improvements
Taxpayers who made qualifying energy-efficient home improvements may be eligible for deductions or credits tied to energy efficiency standards.
Eligibility depends on the type of improvement and proper documentation, and many taxpayers are unaware these benefits exist.
Important Reminder
Not every deduction applies to every taxpayer, and eligibility often depends on income, filing status, and documentation. Tax rules can also change year to year.
For official guidance and updates, the IRS provides detailed information on available deductions and credits here:
https://www.irs.gov/credits-and-deductions
Final Thoughts
New deductions don’t always mean entirely new tax laws — sometimes they’re existing deductions that apply differently due to changes in work, income, or filing rules. Understanding what may apply to you can help avoid missed opportunities and reduce confusion during tax filing.
If you’re unsure whether a deduction applies to your situation, please don’t hesitate to reach out to have your documents reviewed carefully.
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