10 Commonly Overlooked Tax Deductions and Credits

Each year, tax time rolls around before you know it. A great way to prepare is by being proactive and keeping track of any potentially tax deductible items throughout the year. A great way to do that is by gathering your receipts now. By making sure you don’t miss any potential deductions, this will help you increase your tax refund or lower the amount of taxes you owe.

When you prepare your tax return, TurboTax will give you the tax deductions and credits you’re eligible for based upon some simple questions.  To help you plan, here are 10 money-saving tax deductions (and credits) to keep in mind as  you gather your receipts for tax-time.

Education Expenses

There are two education credits available — the American Opportunity Tax Credit and the Lifetime Learning Credit. The American Opportunity Tax Credit is a credit worth up to $2,500 for the expenses you paid for the first four years of college. The Lifetime Learning Credit, worth up to $2,000 per tax return, is available even if you aren’t pursuing a degree. Make sure you count books and lab fees. This includes the books you rent on sites such as Chegg and others.

Camp for Your Kids

You may be entitled to the Child and Dependent Care Credit if your children are under the age of 13, and you took them to a before and after school care program, daycare, or day camp so that you can work or actively look for work. However, overnight and sleepover camps are not eligible for child tax credits.

For tax year 2024, the maximum amount of care expenses you’re allowed to claim is $3,000 for one child or $6,000 for two or more children. The percentage of your qualified expenses that you can claim ranges from 20% to 35%, so you can claim up to $1,050 (35% x $3,000) for one child and up to $2,100(35% x $6,000) for two or more kids. The American Rescue Plan made some major changes to the Child and Dependent Care Credit for tax year 2021 only. For 2021, the expense limit increased from $3,000 for one qualifying individual to $8,000 and from $6,000 for more than one qualifying individual to $16,000. For tax year 2021, the credit was fully refundable, meaning you could  get the credit even if you didn’t  owe any taxes.

Health Insurance

If you are self-employed, you can take a tax deduction for the health insurance premiums you pay for yourself and your family. If you are not self-employed, health insurance premiums paid after taxes may be tax deductible, but only if you can itemize your deductions.

Medical Expenses

Medical expenses, including miles driven for medical reasons (at 21 cents per mile), may be tax-deductible if they exceed 7.5% of your adjusted gross income in 2024 and only if you are able to itemize your tax deductions. The cost of exercise equipment or purchasing and maintaining a spa or swimming pool may be tax-deductible as medical expenses, but only if your doctor recommends them to mitigate a medical condition.

Charitable Contributions

If you made any donations, no matter how small, remember to have your receipts ready since you may be able to deduct them. It’s easy to forget the smaller amounts you contributed to various walks or races, but they add up quickly. You can’t deduct the value of your time when you volunteer, but you can deduct your travel at 14 cents per mile as well as any parking and tolls you paid. Only charitable contributions to qualified charities are tax deductible.

State Income or Sales and Local Tax Deduction

You are permitted to deduct either the state income tax paid or the state sales tax paid, if you itemize your tax deductions. If you live in a state without a state income tax, you would choose to deduct the state sales taxes paid during the year. TurboTax will choose the option that gives you the biggest tax deduction based on your entries. The amount you are able to deduct is capped at $10,000, including property taxes, state income taxes or sales tax.

Home Office

If you use part of your home regularly and exclusively to perform administrative or managerial activities for your self-employed business, you can claim a home office deduction for a portion for home expenses such as utilities, rent, mortgage interest, depreciation, and maintenance. The deductible amount will be based upon the square footage of your home that used exclusively for your business. Many people who are employees worked from home in 2024 and wonder if they can deduct at-home expenses. Following tax reform, you can no longer deduct at home expenses on your federal taxes if you are an employee.

Miscellaneous itemized tax deductions

Miscellaneous itemized deductions like unreimbursed job expenses and tax preparation expenses, unless it’s tax preparation for your self-employment taxes, are no longer available on your federal taxes following tax reform. Uninsured losses due to fire, storms, shipwreck or theft more than 10% of adjusted gross income are tax-deductible only if they are the consequence of a federally declared natural disaster.

Other Dependent Credit

If you are caring for someone other than a child dependent, you can take advantage of this tax credit which equals $500 per non-child dependent that you support.

Mileage Expenses

If you use your vehicle for business and you are self-employed, you can deduct your mileage at 67 cents per business mile driven in 2024. If you work for multiple clients, the cost of traveling between job locations is tax-deductible as well.  Be sure to keep a log of your business mileage throughout the year to help ensure you take advantage of this deduction.

Keeping track of these expenses throughout the year will ensure you don’t miss out on any tax deductions or credits when it comes to filing your taxes.

No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.