10 Commonly Missed Tax Deductions and Credits

Key Takeaways

• Before filing your 2025 taxes, collect receipts for everyday expenses (even small ones) that could add up to meaningful tax savings.
  
• Some of the most overlooked deductions/credits include education costs, charitable contributions, home-office expenses or business mileage, and eligible dependent credits.
  
• Many tax rules remain the same for 2025, but major changes under the One Big Beautiful Bill (OBBB) will go into effect in 2026. Understanding what’s deductible now and what’s changing next year can help maximize your refund.

Tax season has a way of sneaking up on all of us, but staying ahead of it is easier than you might think. Start by keeping track of receipts and any expenses that might qualify for deductions throughout the year. A little organization now can translate into a bigger refund, or at least a smaller tax bill, later on.

You may have heard about the One Big Beautiful Bill, but its major tax changes won’t take effect until the 2026 tax year (the return you’ll file in early 2027). For this year, the rules largely remain the same as last year, with a few exceptions.

When it’s time to file, TurboTax will walk you through simple questions to uncover every deduction and credit you’re eligible for. To help you get a head start, here are 10 money-saving tax breaks worth keeping on your radar as you gather your receipts.

1. Education Expenses

There are two main education credits that can help you save at tax time: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The AOTC can be worth up to $2,500 for the first four years of college (as well as being potentially refundable if you don’t owe any tax for up to $1,000), while the LLC offers a nonrefundable credit of up to $2,000 per return, and applies even if you’re not working toward a degree. Remember to include required course materials, as things like books, lab fees, and even rented textbooks will count toward your credit.

2. Child and Dependent Care

You may qualify for the Child and Dependent Care Credit if you paid for childcare so you could work or look for work. Eligible expenses can include daycare, day camps, and before- or after-school programs for kids under age 13. Keep in mind that overnight or sleepaway camps do not qualify.

For the 2025 tax year, you can claim up to $3,000 in care expenses for one child or $6,000 for two or more. Depending on your income, you can claim 20% to 35% of those expenses (that’s up to $1,050 for one child or $2,100 for two or more). 

3. Health Insurance Deductions

If you’re self-employed, you can typically deduct the health insurance premiums you pay for yourself and your family. If you’re not self-employed, premiums paid with after-tax dollars may be deductible, but only if you choose to itemize your deductions.

Tax Tip: How do I itemize my deductions?

Itemizing your deductions means breaking out eligible tax deductible expenses (like medical costs, mortgage interest, and charitable donations) for the year. You’ll use Schedule A (Form 1040), and you only itemize if the total of the itemized deductible expenses add up to more than the standard deduction for your filing status.

4. Medical Expenses

To deduct medical expenses, your total eligible costs (including travel, treatments, prescriptions, etc.) must exceed 7.5% of your adjusted gross income (AGI). Mileage for medical appointments are calculated at 21 cents per mile under the standard IRS mileage rate for 2025. Keep in mind, you must be able to itemize deductions instead of taking the standard deduction to deduct any medical expenses on your tax return. 

Certain amenities, like exercise equipment, spas, or personal pools are only deductible if a licensed physician recommends them to treat or manage a specific medical condition. Even then, the expense must meet strict “medically necessary” criteria to qualify under IRS rules. 

5. Charitable Donations

If you itemize deductions, be sure to hang onto your receipts if you donated even a small amount to charity this year. You will likely be able to deduct them, and those little contributions to fundraising walks, community drives, or online campaigns can add up faster than you think.

But starting in 2026, even non-itemizers will be able to claim a deduction for charitable contributions, so be aware of that change when planning your charitable giving this year. 

While you can’t deduct the value of your time when you volunteer, you can deduct certain out-of-pocket expenses, such as mileage for charitable travel at 14 cents per mile (the IRS rate, which hasn’t changed for 2026), as well as parking and tolls. 

Remember: only donations made to qualified charitable organizations are tax-deductible, so it’s worth verifying that the group you donated to is on the IRS list.

6. State and Local Tax Deductions

If you itemize your deductions, you can choose to deduct either the state income tax you paid or the state sales tax you paid during the year, depending on whichever gives you a bigger benefit. This is especially helpful if you live in a state with no income tax, since you’d typically choose the sales-tax option instead.

All of these potentially deductible taxes (state income or sales tax plus property taxes) are capped at $40,000 for 2025. The One Big Beautiful Bill has temporarily increased this cap to $40,000 for most filers. TurboTax will run the numbers for you and automatically pick the option that leads to the largest deduction. 

7. Home Office Deduction

You may qualify for the home office deduction if you’re self-employed and use part of your home regularly and exclusively for your business. That space can be where you handle administrative or management tasks for your business like bookkeeping, scheduling, or client emails. As long as it’s your primary place for those activities and you don’t have another fixed office location, you can take the home office deduction.

You can deduct a portion of home expenses such as utilities, rent, mortgage interest, depreciation, and maintenance, usually based on the percentage of your home’s square footage used exclusively for business.

For W-2 employees, the rules are different. Even if you work from home full-time, you generally cannot deduct home office expenses for your job. The Tax Cuts and Jobs Act initially suspended these unreimbursed employee deductions from 2018–2025, and the One Big Beautiful Bill made that suspension permanent, meaning these deductions remain unavailable in 2026 for employees.

8. Mileage Expenses

If you’re self-employed and drive for business, your mileage can translate into a nice tax write-off. For 2025, the IRS has set the standard mileage rate at 70¢ per business mile, up from 67¢ in 2024. 

That means every mile you log for your business could lower your taxable income, as long as you keep a detailed log of your business-related driving to gigs, clients, or side-hustles. To claim the deduction, be sure to keep detailed records including the date, purpose, and distance of each trip.

9. Other Dependent Credit

If you are caring for someone other than a child dependent, you can take advantage of the Family Tax Credit which equals $500 per non-child dependent that you support. The One Big Beautiful Bill made the $500 Credit for Other Dependents permanent, meaning it applies to 2025 and all future tax years.

10. Miscellaneous Itemized Deductions

If you previously relied on “miscellaneous” itemized deductions, such as unreimbursed job expenses or tax-preparation fees, those breaks are mostly gone due to recent tax reform. The One Big Beautiful Bill made the suspension of these deductions permanent.

Losses from disasters like fires, floods, thefts, or storms are now more limited. Personal casualty or theft losses are deductible only if they result from a “qualified declared disaster.”  Starting in 2026, state disasters declared by a governor can also qualify for tax relief.

No matter what financial moves you made last year, TurboTax helps make sure they count. Whether you file your taxes yourself or have a TurboTax expert handle it, you can be confident you’ll get every deduction you qualify for and maximize your refund.