When it comes to filing taxes, most people are aware of the standard deductions and common write-offs like mortgage interest, charitable donations, and medical expenses. But there are some lesser-known, surprising tax write-offs that might surprise you and help you save more money. Here’s a look at some unexpected deductions that you might be able to use to save on your taxes.
1. Pet-related expenses
If you have a pet, you might be able to deduct some of the costs associated with their care. While pet expenses are generally considered personal and non-deductible, there are some exceptions. For example, if your pet is a service animal that assists you with a disability, you can deduct expenses such as food, veterinary care, and training. Additionally, if you foster animals for a qualified charity, you may be able to deduct the costs of pet food, supplies, and even a portion of your utility bills.
Surprise factor: Your furry friend could save you money on your taxes if they provide a service or if you foster animals for a rescue group.
2. Moving expenses for a new job
If you moved for a new job, you might be able to deduct your moving expenses—depending on your circumstances. While the tax law changes in 2018 eliminated the moving expense deduction for most taxpayers, active-duty members of the armed forces who relocate due to a military order can still claim this deduction. If you qualify, you can write off the cost of packing, shipping, storage, and travel expenses related to the move.
Surprise factor: Active-duty military personnel can still benefit from moving expense deductions, which can add up to significant savings.
3. Classroom supplies for teachers
Teachers often spend their own money on classroom supplies, and the IRS allows them to deduct up to $300 of these expenses ($600 for married educators filing jointly). This deduction is available to K-12 educators, including teachers, instructors, counselors, principals, and aides, who work at least 900 hours a year in a school.
Surprise factor: Teachers can reduce their taxable income by claiming a deduction for out-of-pocket expenses on classroom supplies.
4. Home office deduction
If you work from home, you might be eligible for a home office deduction. This write-off applies to those who are self-employed, freelancers, or independent contractors. To qualify, the space you use as your home office must be used regularly and exclusively for business purposes. The deduction can cover a portion of your rent or mortgage, utilities, and other home-related expenses based on the percentage of your home that is used for your business.
Surprise factor: If you have a dedicated home office, you can potentially write off a portion of your housing costs and utilities.
5. Health-related improvements to your home
If you made modifications to your home for medical reasons, you might be able to deduct those expenses. Improvements such as installing wheelchair ramps, widening doorways, or adding railings can qualify as medical expenses if they are medically necessary for you, your spouse, or a dependent. The cost of these improvements can be deducted to the extent that they exceed the increase in your home’s value due to the modifications.
Surprise factor: Necessary home improvements for medical reasons can be written off, potentially reducing your taxable income.
6. Energy-efficient home upgrades
Investing in energy-efficient upgrades to your home can qualify you for tax credits. The federal government offers tax credits for certain energy-efficient home improvements, such as installing solar panels, energy-efficient windows, doors, and insulation. These credits can directly reduce the amount of tax you owe.
Surprise factor: Going green at home can not only save you money on energy bills but also on your taxes, thanks to available tax credits.
7. Student loan interest paid by your parents
If your parents paid off your student loans, you might be able to deduct the interest on those loans—even if they paid. The IRS treats the payment as if it were a gift to you, meaning you can claim the interest deduction, as long as you’re not claimed as a dependent on your parents’ tax return.
Surprise factor: Even if someone else (like your parents) helps you with your student loans, you might still be eligible to claim the interest deduction.
8. Travel expenses for charity work
If you travel for charitable work, you may be able to deduct some travel expenses. For example, if you use your car to volunteer for a charity, you can deduct the mileage at the IRS standard mileage rate for charitable activities. If you travel out of town for a volunteer project, you may also be able to deduct the cost of lodging and meals.
Surprise factor: Volunteering for a good cause can come with tax benefits, allowing you to deduct related travel expenses.