Hidden Tax Deductions: Are You Leaving Money on the Table?

By Brett Gottlieb

For many, tax season is just something to get through as quickly and painlessly as possible. As a result, many filers stick to the standard, most well-known deductions and credits—often missing out on valuable tax breaks.

However, the right deductions can significantly reduce your tax bill. Here are some commonly overlooked tax credits and deductions that could help you save.

Tax Deductibles vs. Tax Credits

Tax deductions reduce the amount of taxable income you incur before taxes are assessed. With the right deductions, you could potentially move into a lower tax bracket.

By contrast, tax credits apply after your liability has been calculated, reducing your overall tax bill. Credits are based on income, expenses, and other factors. Every credit dollar reduces your tax bill by the same amount.

Wealthy, high-income taxpayers may benefit more from deductions, while lower-income families may earn more from credits. Shrewd taxpayers take advantage of both.

State and Local Tax Deductions

The breaks most taxpayers ignore involve the imposition of state sales taxes. With the wild variance of tax laws from state to state, it’s easy to see how they get missed. However, they can add up.

States Without Income Tax

Taxpayers in states without income tax may be able to deduct major purchases up to the limits outlined by the IRS. Alternatively, they can track their sales tax incurred last year and base their deductions on those.

States With Income Tax

Taxpayers in states that charge income tax also must choose between those two structures (income vs. sales taxes). However, the income tax option is usually best. You can deduct up to $10,000 (or $5,000 for married couples filing separately) of combined property taxes and income or sales taxes.

Individual and Home-Based Tax Deductions and Credits

Many of the best opportunities for saving on taxes are centered around life and home. The following are some of the more overlooked or forgotten breaks.

Mortgage Interest Reduction

As of the 2025 tax year, homeowners who itemize their deductions can continue to deduct mortgage interest on loans up to $750,000. However, the deduction for mortgage insurance premiums expired after the 2021 tax year and is no longer available.

Note that the $750,000 limit on deductible mortgage debt was established by the Tax Cuts and Jobs Act (TCJA) and is set to revert to the previous $1 million limit after 2025.

Renewable Energy Credits

Homeowners switching to renewable energy sources can write off certain expenses. You may be able to take up to 30% of the installation costs for installing solar panels, water heaters, or HVAC systems. You may also get a non-refundable credit for a new electric vehicle if it meets IRS guidelines (credit amounts range from $3,750 to $7,500).

Saver’s Credit

The saver’s credit helps low-to-medium-income taxpayers contribute to an IRA, 401(k), 403(b), and certain other retirement funds. The credit runs between 10% and 50% of up to $2,000 for each individual.

Charitable Contributions

If you itemize your deductions or donate to a charity via certain approved strategies then you may be able to deduct the total from your taxable income.

Education Deductions

The IRS facilitates continuing education with several learning tax credits:

American Opportunity Tax Credits

Students can claim the first $2,000 spent (and 25 percent of the next $2,000) on approved educational expenses, such as tuition, books, and school fees.

Lifetime Learning Credit

The lifetime learning credit helps post-graduates continue their education. They can claim 20% of the first $10,000 spent on expenses, to a maximum of $2,000.

Student Loan Interest

Taxpayers repaying their student loans can deduct the amount they paid in interest over the last year. The maximum you can claim in 2024 and 2025 is $2,500.

Business Tax Deductions

Business owners and self-employed individuals have numerous options for reducing their tax bills.

Self-Employed Expense Deductions

Self-employed individuals can write off select expenses, such as continuing education, retirement savings, mileage reimbursement, and certain kinds of health insurance. Those working out of residences may qualify for home-office deductions as well.

Small Business Owner Tax Deductions

Some of the most helpful deductions for small business owners include:

• Qualified business income deductions
• Research and development tax credits
• Family and medical leave credit
• Section 179 expenses, such as equipment and machinery

Check with your accountant to verify that you’re taking advantage of all applicable breaks.

Healthcare and Medical Deductions

You might qualify for certain expenses related to healthcare and medicine, including the following.

Medical Expense Deductions

If you itemize deductions, you may qualify to have certain medical expenses subtracted from your taxable income. Expenses must surpass 7.5% of your adjusted gross income.

HSA Contribution Deductions

If you’ve opened a health savings account (HSA), your contributions to the fund may be deductible.

Discover Additional Hidden Tax Deductions & Credits

These are some of the most overlooked tax deductions, credits, and benefits available, but additional opportunities may apply to your situation. (For the most current information and personalized advice, consult the latest IRS guidelines or a tax professional.)

To explore how these tax strategies fit into your financial plan or address any investment concerns, schedule a complimentary call with our team at Comprehensive Advisor by emailing us at info@ComprehensiveAdvisor.com or calling (760) 813-2125.

About Our Advisors

Brett Gottlieb is the founder of Comprehensive Advisor and a financial advisor with nearly two decades of industry experience. He graduated from California State University-Chico with two bachelor’s degrees, in business administration and economics, and is Life Insurance licensed in several states. He is passionate about guiding his clients on retirement income planning, helping each client pursue their specific retirement goals, and defending the assets his clients have worked so hard to achieve. Brett is a California native and currently resides in San Elijo Hills with his beautiful wife and three children.

Our team of qualified professionals have experience in the financial service industry, and our advisors hail from some of the largest independent broker/dealers and banking institutions in the country. They have dedicated their professional careers to creating personalized financial strategies for individuals and families who seek successful retirement planning and currently offer investment advisory services through AE Wealth Management, LLC. Our advisors take a common-sense approach to the planning process and work with clients to create a comprehensive retirement roadmap to help ensure their assets are preserved and they receive the income needed to enjoy their future. Based in Carlsbad, California, they work with clients throughout San Diego County and beyond. Learn more by connecting with Brett on LinkedIn or email them at info@ComprehensiveAdvisor.com.

Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. Insurance products are offered through the insurance business C.A. Financial & Insurance Services.Comprehensive Advisor, LLC is an Investment Advisory practice that offers products and services through AE Wealth Management LLC (AEWM), a Registered Investment Advisor. AEWM does not offer insurance products. The insurance products offered by C.A. Financial & Insurance Services are not subject to investment Advisor requirements. CA Ins. Lic. #6000262. 

Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 2872738 – 2/25