Tax Season Tips: How to Maximize Your Deductions This Year

No one wants to leave money on the table. With a little planning and the right paperwork, you can turn ordinary expenses into legitimate tax deductions—without stress or guesswork.

Start with the big decision: standard deduction or itemize?

Your first fork in the road is simple: take the standard deduction or itemize on Schedule A. The standard deduction is straightforward—no receipts, no math beyond the basics. Itemizing takes work, but it can beat the standard deduction if your deductible expenses are high enough.

Itemized deductions typically include:

State and local taxes (subject to the current SALT cap)
Mortgage interest on qualified home loans
Charitable contributions
Medical expenses above the AGI threshold
Certain casualty and theft losses (in limited scenarios)

Who should consider itemizing:

Homeowners paying meaningful mortgage interest and property taxes
People with large charitable gifts or donor-advised fund contributions
Those with big out-of-pocket medical bills
Taxpayers in high-tax states, especially with notable real estate taxes (but remember the SALT limit)
Investors with deductible margin interest

If you’re unsure, add up your likely Schedule A categories and compare to the current standard deduction for your filing status. If the total is close, lean into timing strategies (more on that below) to push yourself above the line. For many people, the breakeven hinges on mortgage interest and SALT; for others, bunching charitable gifts in a single year is the winning play.

Don’t skip “above-the-line” deductions

“Above-the-line” deductions reduce your adjusted gross income (AGI) before you even decide whether to itemize. Lower AGI often unlocks additional savings because many credits and deductions phase out as AGI climbs.

High-impact adjustments to consider:

Health Savings Account (HSA) contributions when paired with a qualifying high-deductible health plan
Traditional IRA contributions (subject to income and plan coverage rules)
Self-employed retirement plan contributions (SEP IRA, Solo 401(k))
Student loan interest (up to the annual cap, subject to income limits)
Educator expenses for eligible teachers
Self-employed health insurance premiums
Alimony paid (only for pre-2019 divorce agreements)

If you freelance or run a side business, don’t miss mileage, home office, and retirement contributions—these are routinely overlooked and often the largest deductions available.

Health costs: HSAs, FSAs, and medical deductions

Health accounts are some of the most efficient tax tools available.

HSA: Triple tax advantage—deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. You can reimburse yourself years later if you keep the receipts, effectively turning your HSA into a stealth retirement account.
FSA: Fund with pre-tax dollars through your employer to cover allowed medical or dependent care expenses. Know your plan’s carryover or grace period rules so dollars don’t expire.
Medical itemization: Medical and dental expenses count only to the extent they exceed a percentage of your AGI. Costs such as premiums (if paid with after-tax money), long-term care insurance (sometimes partially), dental, vision, and medically necessary travel may qualify. Keep detailed receipts and explanations of medical necessity when it’s not obvious.

Timing matters. If you’re nearing the AGI threshold for medical expenses, consider scheduling procedures or refilling annual prescriptions in the same calendar year to clear the hurdle.

Charitable giving: more impact, better documentation

Charitable contributions pay off when you itemize and keep proper records.

Cash gifts: Keep bank records or written acknowledgments for every donation. For $250 or more, you need a contemporaneous acknowledgment from the charity showing no goods or services were received in return (unless it was a ticketed event).
Non-cash gifts: Deduct fair market value for clothing, furniture, and household items in good condition. For higher-value items (over $500 in total), you’ll need extra forms; over $5,000 may require a qualified appraisal.
Appreciated stock: Donating appreciated securities held more than one year can avoid capital gains tax and give you a deduction for full fair market value. Ask your charity for transfer instructions.
Donor-Advised Funds (DAFs): Useful for “bunching” multiple years of giving into one tax year to exceed the standard deduction, while distributing grants to charities over time. Pair with appreciated stock for extra efficiency.
Qualified Charitable Distributions (QCDs): If you’re age 70½ or older, direct up to the annual limit from your IRA to a qualified charity. It counts toward required minimum distributions and is excluded from income, which can help reduce Medicare premium surcharges and taxation of Social Security.

When donating property or crypto, documentation rules are strict. Get the right forms and keep transfer records; the IRS pays close attention here.

Home, mortgage interest, and the SALT limit

Homeowners get powerful deductions, but the rules matter.

Mortgage interest: Interest on acquisition debt used to buy, build, or substantially improve your primary or secondary home is generally deductible up to current loan limits. Points paid on a purchase may be deductible; points on a refinance are usually amortized over the life of the loan.
Property taxes: Deductible but subject to the SALT cap when combined with state income or sales taxes. For many taxpayers, this cap is the single biggest barrier to itemizing.
Private mortgage insurance (PMI): Eligibility has changed over the years; confirm the current-year status before claiming.
Home improvements vs repairs: Interest is tied to acquisition/improvement debt. Keep a file of home improvement costs—it won’t help with annual deductions, but it can reduce taxable gain when you sell.

Avoid prepaying property taxes that aren’t yet assessed, and don’t try to prepay next January’s mortgage interest in December to shift deductions; the IRS looks at interest actually paid/accrued.

_{Photo by Ben Wicks on Unsplash}

Self-employed and side hustles: bigger deductions, bigger opportunity

Running your own shop—full-time or on the side—opens the door to substantial deductions on Schedule C (or through your entity).

Home office: Deduct a share of rent/mortgage interest, utilities, insurance, and repairs if a space is used regularly and exclusively for business. The simplified method uses a flat rate per square foot; the regular method often yields larger savings if you track expenses well. Form 8829 supports the regular method.
Vehicle costs: Choose standard mileage or actual expenses (fuel, depreciation/lease, insurance, repairs). Keep a contemporaneous mileage log noting date, destination, purpose, and miles. Apps make this painless—and logs win audits.
Equipment and software: Deduct or depreciate computers, phones, business software, and gear. Section 179 and bonus depreciation rules can allow immediate expensing up to limits; percentages change by year, so verify current allowances before you file.
Retirement plans: SEP IRAs and Solo 401(k)s can supercharge deductions while building wealth. Solo 401(k) plans may allow both employee deferrals and employer profit-sharing, creating room for larger contributions depending on income.
Health insurance: If you’re not eligible for an employer-subsidized plan, self-employed health insurance premiums are usually deductible above the line.
Meals and travel: Most business meals are 50% deductible; keep the receipt showing date, place, and business purpose. Travel must be ordinary and necessary; blend personal days carefully or allocate costs.
Accountable plan: If you run an S-corp, reimburse yourself through an accountable plan for home office, mileage, and cell phone. Proper documentation turns out-of-pocket costs into deductible business expenses without payroll taxes.

Also consider the Qualified Business Income (QBI) deduction, which can reduce taxable income for many pass-through businesses. It’s complex, with phase-outs and special rules, so run scenarios if your income is near thresholds.

Investors and rental property: interest, losses, and paperwork

Investment and rental deductions are often missed because statements arrive late and rules are layered.

Investment interest: If you borrow to invest (like margin loans), interest may be deductible up to your net investment income. Unused amounts can carry forward.
Tax-loss harvesting: Realize losses to offset realized gains and up to the annual limit of ordinary income. Watch wash-sale rules—repurchasing “substantially identical” securities within 30 days disallows the current deduction and adjusts basis instead.
Cost basis method: Specific identification can reduce taxes by letting you sell high-basis lots first. Set your preference with your broker and confirm every sale.
3.8% Net Investment Income Tax: If your income is above thresholds, dividends, interest, capital gains, and rental income may trigger this extra tax; deductions that reduce AGI can help.
Rental properties: Deduct mortgage interest, property taxes (not subject to SALT cap on Schedule E), insurance, repairs, HOA fees, travel for management, and depreciation. Repairs are currently deductible; improvements are capitalized and depreciated—use the de minimis safe harbor and routine maintenance safe harbor when allowed. Passive activity loss rules can limit deductions unless you qualify as a real estate professional or meet the short-term rental participation rules.

Keep separate bank accounts for rentals and investments. Mixing finances makes tracking deductions far harder and weaker in an audit.

Timing moves: bunching, shifting, and smoothing

Deductions often come down to timing. Use the calendar.

Bunching: Group charitable gifts, elective medical procedures, and property tax payments (within the rules) into one tax year to exceed the standard deduction and itemize.
Retirement contributions: Max out traditional IRA or employer plan contributions before deadlines. Some contributions can be made up to the return due date.
Estimated taxes: If you owe each year, prepaying by the right quarter can avoid penalties and smooth cash flow. State payments affect SALT totals; avoid paying taxes that aren’t due or assessed.
Capital gains and losses: Harvest losses late in the year, then wait 31 days to avoid wash sales—or swap into similar, not identical, holdings.

If your income fluctuates, model two years side by side. The best deduction in one year might be average at best the next.

Records that win audits (and save time)

Good records are the difference between “sounds right” and a deduction that sticks. The IRS doesn’t require a fancy system; it wants clarity.

Save digital copies of receipts, invoices, and acknowledgments. Name files with date, vendor, amount, and purpose.
Keep a mileage log and home office measurements with photos or floor plans.
Store brokerage tax forms (1099s), K-1s, and basis statements together and reconcile them to your return.
For non-cash donations over $500, keep detailed descriptions, condition, and valuation sources; over $5,000, retain your appraisal and Form 8283.
Back up everything. Cloud plus local storage is best.

A neat paper trail not only protects deductions—it cuts your prep time and accountant fees.

Smart tools that make deductions easier

1. TurboTax Deluxe : Strong guidance for itemizing, Schedule A details, and importing investment forms.
1. H&R Block Online Premium: Helpful for self-employed and investors with K-1s and rental property.
1. FreeTaxUSA Deluxe : Budget-friendly with support for common schedules and prior-year import.
1. Keeper Tax : Finds deductible expenses for freelancers by scanning transactions and categorizing.
1. QuickBooks Self-Employed : Mileage tracking, receipt capture, and quarterly tax estimates in one place.

Pick tools that match your situation; if you own a business or rentals, software that tracks basis and depreciation is worth it.

Costly myths and easy fixes

“I can deduct all home expenses because I sometimes work at the kitchen table.” Not unless the space is used regularly and exclusively for business. If not, skip it and focus on other deductions.
“Big charitable donations don’t need paperwork.” They do. Anything $250 or more needs a proper acknowledgment. Crypto and non-cash gifts have extra steps.
“I’ll deduct client meals at 100%.” The temporary 100% restaurant deduction window closed; most meals are back to 50%. Keep itemized receipts.
“My advisor fees are deductible.” For individuals, most investment advisory fees are currently not deductible as miscellaneous itemized deductions. Don’t claim what the law doesn’t allow.
“Prepaying next year’s expenses always helps.” Not always. SALT caps, interest timing, and prepayment rules can block the benefit. Time the right expenses, not every expense.

When in doubt, look up the instruction for the form line you’re using. A five-minute check can save hours later.

A quick, practical deduction checklist

Compare itemizing vs standard deduction using last year’s numbers plus known changes.
Max out above-the-line adjustments: HSA, IRA, self-employed health insurance, educator expenses, student loan interest.
If giving to charity, decide: cash now, appreciated stock, DAF, or QCD (if eligible). Gather acknowledgments.
For homeowners, confirm mortgage interest and points on Form 1098, and check property taxes within the SALT cap.
For self-employed, update your mileage log, calculate home office space, and list big equipment/software buys.
For investors, reconcile 1099s, track wash sales, confirm basis method, and match margin interest to investment income.
For rentals, separate repairs vs improvements and ensure depreciation schedules are up to date.
Bunch expenses where it makes sense; preview your return before year-end to identify gaps.
Save every relevant receipt and statement to a dedicated folder for this tax year.

One final note: Tax law evolves. Before you file, confirm current-year limits and forms on irs.gov or with a qualified pro. A tidy return with well-supported deductions will go through smoothly—and keeps more of your money working for you.

External Links

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