10 Overlooked Tax Deductions Most Individuals Miss Every Year

Most people file their taxes thinking they covered everything… only to discover they left money on the table. The U.S. tax code is full of deductions and credits designed to reduce your tax bill — but many of the most valuable ones are also the easiest to miss. At Connell Tax & Advisory, we help families and individuals take advantage of every tax-saving opportunity.

Below are 10 commonly overlooked deductions and credits that could meaningfully lower your tax burden this year.

1. State Sales Tax Deduction (Even If You Don’t Itemize Often)

Most people assume they can only deduct state income taxes — but you can choose to deduct state sales tax instead.

This is valuable if:

• You live in a state with high sales tax and low income tax

• You made large purchases (car, RV, appliances, furniture)

• You had major renovation or construction expenses

Even if you didn’t track receipts, the IRS provides a sales tax calculator you can use.

2. Medical Miles Driven to Appointments

You can deduct miles driven for medical appointments, prescriptions, therapy visits, and certain health-related errands.

For 2025, the IRS medical mileage rate is eligible as long as:

• The mileage is documented

• The medical expenses exceed 7.5% of your AGI when itemizing

People often forget this — but it adds up quickly.

3. Student Loan Interest Paid by Someone Else

If someone makes student loan payments on your behalf, the IRS generally treats it as though you received the money first, then paid the loan — meaning you may be able to take the deduction. This applies even if the payer isn’t a dependent.

4. Educator Expenses for Teachers

Teachers, instructors, classroom aides, and principals may deduct:

• Classroom supplies

• Books

• Software

• Professional development

• Classroom materials purchased out-of-pocket

This deduction increases periodically and is available even if you do not itemize.

5. Job Search and Career Development Costs (Often Missed)

While not all job-search costs are deductible, certain professional-development and education expenses related to your current career may still qualify, including:

• Industry certifications

• Continuing education

• Certain licensing fees

• Professional dues

If the expense maintains or improves your skills, it may be deductible or qualify for a credit.

6. Home Office Deduction — Even for Partial Use

If you are self-employed, gig-working, or freelancing, you may qualify for a home office deduction — even if:

• Your workspace is small

• It's a sectioned-off corner of a room

• You only use part of a room exclusively

You can choose the simplified method or calculate actual expenses.

7. Charitable Contributions You Didn’t Realize Were Charitable

Most people think of cash donations, but you can also deduct:

• Clothing and household goods donated to nonprofits

• Mileage driven for volunteer work

• Out-of-pocket expenses for volunteering

• Supplies purchased for charitable events

• Donations of appreciated stock (a powerful tax-saving move)

Just remember: donations must go to a qualified charity.

8. State Tax Refunds (If You Itemized Previous Year)

Many individuals forget that state refunds may be taxable — but also forget they may be negative income (a deduction) in certain situations.

A proper review helps prevent surprises.

9. Energy Efficiency Home Credits

If you improved your home this year, you may qualify for a credit for:

• Insulation

• New windows or doors

• Heat pumps

• Water heaters

• Solar and renewable energy systems

These credits can be generous and are often missed because people assume they need extensive documentation (which is not always the case).

10. Health Insurance Premiums for Self-Employed Individuals

If you’re self-employed and pay for your own health insurance, you may be able to deduct:

• Health premiums

• Dental premiums

• Vision premiums

• Long-term care insurance (up to limits)

This deduction reduces AGI, which can increase eligibility for other credits.

The Bottom Line: Small Deductions Add Up to Real Savings

Most individuals overlook at least one of these opportunities each year — especially if they file quickly, rely solely on software, or don’t review their full financial picture.

At Connell Tax & Advisory, we help families and professionals uncover every deduction, every credit, and every tax-saving option available to them. The result? Less stress, more clarity, and a tax bill that reflects the small advantages that add up in a big way.

If you’d like a personalized deduction review, we’re here to help.