Tax season is stressful. For many small business owners and taxpayers, it means weeks (or months) of sorting through receipts, puzzling over forms, and hoping they haven’t overpaid. Unfortunately, millions of Americans leave significant amounts of money on the table each year by missing crucial deductions. 

But here's the good news, you don’t have to be one of them. With the right knowledge and tools, you can uncover these hidden savings and keep more of your hard-earned money. 

Nerd Note: Did you know that each year the IRS produces a shadow return with all your income? While other countries disclose this expected tax due or refund before a return is needed, our lovely collectors compare it after we prepare our own to file. By knowing what to look for & what they know, you can reduce both your tax liability and headache. 

Are You Leaving Money on the Table with Your Taxes? 

Take Sarah, a contracted software developer, who unknowingly overpaid her taxes for years. She wasn’t aware she could deduct her home office expenses, the professional bootcamp she took, or even the health insurance premium she paid as a self-employed individual. Once she discovered these commonly missed deductions, Sarah reclaimed thousands in tax savings. 

Sound familiar? If Sarah’s story resonates with you, chances are you might miss out on your own savings. Tax rules can be complex, but hidden within them are opportunities to stretch every dollar further. 

The Complexity That Can Cost You

Why are these deductions often overlooked?

1. Complex Tax Laws: The U.S. tax code is nearly 7,000 pages long and constantly changing. Staying on top of all deductions can feel overwhelming.
2. Lack of Awareness: Many deductions are either obscure or nuanced, making them easy to miss without guidance.
3. DIY Approach: Relying solely on online tools or personal knowledge often leads to missed opportunities.
4. Reactive Tax preparation: Looking retroactively at tax deductions can cause potential savings to be missed. Not everything can be taken advantage of in the new year.

Tax professionals can offer a wealth of insight. They know the ins and outs of evolving tax laws, ensuring you take advantage of every deduction you’re eligible for.  The trick is finding a professional who can be proactive with their approach to not miss opportunities moving forward and to plan ahead.

10 Tax Deductions You Can’t Afford to Miss

Here are the most commonly missed deductions, and how you can claim them. 

1. Mortgage Interest 

If you’re a homeowner, you might be eligible to deduct the mortgage interest reported on Form 1098. However, this applies only if you itemize your deductions and the loan doesn’t exceed $750,000. 

2. Healthcare and Medical Expenses 

Medical expenses exceeding 7.5% of your adjusted gross income (AGI) are deductible, these most often will come in particularly high expense & lower income years. Self-employed? You can also write off your health insurance premiums if properly reported.  

3. Charitable Contributions 

Don’t forget to claim donations to charities! Even $1 counts, as long as you have proper documentation. Maximize this benefit with donor-advised funds (DAFs), which allow you to “bunch” contributions in one year for a greater deduction. 

4. Retirement Contributions 

Investing in 401(k)s, IRAs, or HSAs doesn’t just prepare you for the future, it also reduces your taxable income today. Entrepreneurs might benefit even more with plans like solo 401(k)s. 

5. Home Office Deduction 

If you work from home and are self employed, claiming a home office deduction is a must. Whether you use the simplified method ($5 per square foot) or the percentage method, this deduction can provide significant savings. 

6. Section 179 Deduction for Business Equipment 

Purchased new equipment for your business? You may be able to deduct its entire cost in the year of purchase, thanks to the Section 179 deduction and bonus depreciation. 

7. Augusta Rule

Self-employed individuals can rent their residences to their businesses for up to 14 days a year, tax-free! For example, holding client meetings at your home could unlock this unique tax benefit. 

8. Professional Development 

Attended a seminar, conference, or training this year? If it enhanced your business skills, the costs are deductible if you receive a contract or self employed income. If you are employed, consider asking for a reimbursement for your continued education.   

9. Qualified Business Income (QBI) Deduction 

If you’re self-employed, you may be eligible to deduct up to 20% of your net business income. However, higher earners may face phase-out limitations. Strategic planning can ensure you maximize this benefit. 

10. Child and Dependent Care Expenses 

Working parents, take note! Childcare expenses incurred while you work can often be deducted, providing much-needed relief during tax season.

Being Prepared vs. Scrambling at Tax Time 

Make tax season smoother by keeping accurate records year-round. Use bookkeeping software, track all expenses, and regularly consult with a trusted tax professional. 

Nerd Note: Did you miss deductions in previous years? You can amend your tax return for up to three years to claim eligible savings. It’s not too late to get back what you’re owed!  We regularly review returns for the families and businesses we work with and amend returns for thousands of missed savings.

Partnering with Experts for Bigger Savings 

Navigating your taxes doesn’t have to be a solo mission. Tax professionals can help uncover deductions, optimize your filing strategy, and ensure compliance with the latest tax regulations. 

At HealthyFP, we specialize in helping families and small business owners maximize their tax savings. Taxes can be complex, but with the proper guidance, we’ll make sure you never overpay again. By staying proactive and informed, you can maximize every dollar.