Top 10 Overlooked Tax Deductions and Credits for 2025

Many taxpayers leave money on the table every year by missing out on deductions and credits they’re eligible for. While the tax code is complex, identifying these overlooked opportunities could save you thousands. This guide reviews the top 10 overlooked tax deductions and credits for 2025, with actionable advice on how to claim them.

1. State Sales Taxes

Taxpayers in states with no income tax can deduct state sales taxes instead. Even if you pay state income tax, it may be worth comparing both. Use the IRS tables or keep receipts for big purchases like cars or boats. IRS Topic No. 503.

2. Student Loan Interest (Even if You Didn’t Pay It)

If someone else paid your student loan, the IRS still considers it as if you paid it yourself — and you may deduct up to $2,500. This deduction phases out at higher incomes, so check the limits on IRS Topic No. 456.

3. Out-of-Pocket Educator Expenses

K-12 teachers, aides, and instructors can deduct up to $300 (or $600 if married and both educators) for classroom supplies they paid for personally.

4. Charitable Contributions Without Itemizing

For 2025, even if you take the standard deduction, you may still deduct up to $300 of cash charitable contributions per taxpayer. Keep documentation for all donations.

5. Earned Income Tax Credit (EITC)

Even if you don’t owe any tax, the EITC could give you a refund. Many eligible taxpayers miss this credit because they think they earn too much. Income limits vary by family size, so consult the IRS EITC page to check eligibility.

6. Medical and Dental Expenses Above the Threshold

If your unreimbursed medical expenses exceed 7.5% of your adjusted gross income (AGI), the excess is deductible. Keep detailed receipts for treatments, prescriptions, and mileage for medical trips.

7. Moving Expenses for Military

While moving expenses are no longer deductible for most, active-duty military members moving due to a permanent change of station can still deduct reasonable expenses.

8. Home Office Deduction

If you use part of your home regularly and exclusively for business, you may deduct a portion of your rent, mortgage interest, utilities, and insurance. This applies to both self-employed individuals and certain employees (if unreimbursed by the employer).

9. Energy-Efficient Home Improvements

The Energy Efficient Home Improvement Credit and Residential Clean Energy Credit allow homeowners to claim credits for qualifying improvements like solar panels, insulation, and energy-efficient windows. These credits have expanded for 2025 — details available at IRS Energy Credits.

10. Saver’s Credit

Low- and moderate-income taxpayers who contribute to retirement accounts (like IRAs or 401(k)s) may qualify for a credit up to $1,000 ($2,000 if married filing jointly). It’s in addition to the normal deduction for contributions.

The Bottom Line

By staying informed and proactive, you can uncover overlooked deductions and credits that lower your tax bill or increase your refund. Run the numbers carefully and consult the official IRS guidance to ensure you claim everything you’re entitled to.

Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as legal, tax, or accounting advice. Tax situations are often complex and highly specific to the individual or business. You should contact a qualified tax expert directly to discuss your particular circumstances. Nothing herein is intended to, nor does it, create an attorney-client or advisor-client relationship. For individual guidance, please contact us directly.