10 Tax Deductions People Commonly Miss on Their 2025 Returns

Filing a return in 2025 is easier when you know which deductions are frequently missed. Tax systems vary across countries, but many deductions are built around similar ideas: costs tied to earning income, health-related spending, charitable giving, and certain investments. The items below are widely relevant in systems such as the United States and may have analogs elsewhere. Always check the rules for your location, income level, and filing status.

Here are ten deductions people often miss:

1. State and local sales tax election: In some systems (like the U.S.), you may deduct either state and local income taxes or state and local sales taxes. If you live where there’s no income tax, made large purchases, or paid significant sales tax, the sales tax election can sometimes be more valuable.

2. Personal property tax on vehicles: Registration fees or taxes based on a vehicle’s value (ad valorem) may be deductible as personal property tax when itemizing. Flat fees generally don’t qualify, so check your bill’s breakdown.

3. Non-cash charitable donations and volunteer mileage: Donating clothing, furniture, or equipment to qualified organizations can be deductible when properly valued. Many filers also forget the mileage or small out-of-pocket costs incurred while volunteering for eligible charities.

4. Educator classroom expenses: Eligible teachers and certain education professionals can deduct qualified out-of-pocket expenses for classroom supplies, reference materials, or professional development, subject to annual caps and definitions set by the tax authority.

5. Health Savings Account (HSA) contributions made directly: If you’re eligible for an HSA and contribute outside of payroll, those contributions may be deductible. Keep records of contribution dates and amounts to avoid double-counting with any pre-tax payroll contributions.

6. Traditional IRA contributions (if eligible): Depending on income, coverage by a workplace plan, and local rules, contributions to a traditional retirement account may be deductible. Many people contribute late in the season and forget to claim the corresponding deduction.

7. Home office deduction for the self-employed: If part of your home is used regularly and exclusively for business, qualifying expenses (such as a share of rent, utilities, and internet) may be deductible. The space must meet eligibility tests; casual or occasional use won’t qualify.

8. Self-employed health insurance premiums: Many self-employed individuals can deduct premiums for medical, dental, and qualifying long-term care insurance, generally up to business income limits and coordination rules with any subsidized employer coverage.

9. Medical and dental expenses above the threshold: Significant out-of-pocket costs—prescriptions, certain treatments, dental and vision care—may be deductible to the extent they exceed a percentage of your adjusted income under local rules. Don’t overlook travel mileage or modest lodging tied to necessary medical care when allowed.

10. Investment interest expense: If you borrow to invest in taxable assets, interest may be deductible up to your net investment income. This area has strict limits and documentation requirements, so confirm the calculations before filing.

Why Deductions Are Often Overlooked

Deductions slip through the cracks for practical reasons: people rely solely on employer forms, forget small receipts, or assume items are too minor to matter. Others are unsure which expenses qualify or how to value non-cash donations. Rules also shift, creating confusion from one year to the next. Finally, digital purchases and subscriptions blend personal and work use, making it hard to separate business-eligible costs. A deliberate review—especially of health, education, and charitable activities—reduces guesswork and helps surface legitimate deductions you might otherwise miss.

Why Documentation Matters

Good records transform vague memories into substantiated deductions. Keep invoices, dated bank or card statements, mileage logs, acknowledgment letters from charities, and appraisals for higher-value non-cash donations when required. For mixed-use items like a phone or internet plan, note the business-use percentage and how you calculated it. A simple folder system—paper or digital—organized by category (charity, health, retirement, education, business) makes year-end easier. Documentation not only supports your numbers if questions arise, it also helps you spot patterns—like recurring professional costs—that you can plan for more tax-efficiently in the future.

Standard Deduction vs. Itemizing

In systems that allow a standard deduction, you’ll generally compare it against your total itemized deductions and choose the higher amount. Many filers default to the standard deduction because it’s simple and often larger than their itemized total. However, major events—buying a home with mortgage interest, paying significant property or state taxes (subject to caps), incurring high medical costs, or making sizable charitable gifts—can tip the balance toward itemizing. Run the numbers both ways. Even if you take the standard deduction, some adjustments (such as eligible HSA or IRA contributions) may still reduce taxable income outside of itemizing.

When Professional Help May Be Useful

While many people can file using reputable software and good records, professional help can be useful when you have self-employment income, rental properties, significant investments, equity compensation, cross-border issues, or large charitable or medical deductions. A qualified tax professional can clarify eligibility rules, optimize the standard-vs.-itemizing decision, and ensure complex deductions (like investment interest or home office calculations) are done correctly. If you expect life changes—marriage, divorce, a home purchase, or starting a business—advice before year-end can be especially valuable, giving you time to adjust contributions, timing of payments, or documentation practices.

In summary, small, legitimate deductions add up. Review the ten areas above, keep tidy documentation, and verify local rules that apply to your situation. A methodical approach increases accuracy and helps ensure you don’t leave eligible deductions unclaimed on your 2025 return.