13 Overlooked Tax Deductions That Will Boost Your Return This Year

Don't forget about these easily forgotten tax deductions to get a bigger refund.

Tax season is here, and it’s time to get organized and prepared for the grueling task of filing your taxes. It’s important to be aware of all the deductions and tax credits available to you, so you don’t miss out on valuable savings — and a bigger IRS tax refund. Check out this list of commonly overlooked tax deductions that you should be taking advantage of so you can potentially save hundreds or thousands of dollars on your state or federal tax return.

Here are 13 of the most overlooked tax deductions that could keep more money in your pocket.

1. Sales and Income Taxes

Many filers forget to include state sales and income taxes paid as deductions. If you live in a state that doesn’t impose an income tax, tallying up all the tax you’ve paid on personal and household items can really add up to savings. On the other hand, if your state does have a state income tax, it’s usually a better strategy to claim that as a deduction on your tax forms for more savings unless you made some big-ticket purchases such as a car or boat. But, to be sure you’ll get the biggest savings, you’ll have to consider the amount of sales tax charged by your state.

Learn: How to Know If You Can Really Write Off That Donation

2. Medical Expenses

You might be able to deduct some of your yearly medical or dental expenses if you itemize your deductions on your return. However, you can only deduct non-reimbursed medical expenses that exceed 10 percent of your adjusted gross income. Expenses that are not deductible include funeral and burial expenses, toothpaste, over-the-counter medicines, toiletries and the majority of cosmetic surgery.

3. Charitable Donations

Although this is one of the more common federal tax deductions, many taxpayers make the mistake of focusing only on large donations or those made to charities that send an end-of-year letter or receipt. But if you’ve covered the cost of postage, baked cookies for fundraisers, donated clothes to a charity or given rides to the clients of nonprofit organizations, save your receipts for tax-preparation time.

For receipts that add up to more than $250, you can deduct the amount if you have documentation from your favorite nonprofit. Providing rides or doing other significant driving for a charity allows you to claim 14 cents per mile as well.

4. Child and Dependent Care Credit

Child care expenses can open the door to a substantial tax credit, thanks to high potential amounts and no income limits. Just like the many of the 2016 tax credits and deductions that didn’t change this year, this one didn’t either. In 2017, you can deduct up to $3,000 for one child or dependent — or up to $6,000 for two or more.

If you have childcare reimbursement through your place of work, you can easily overlook the additional costs you incur beyond the $5,000 or $6,000 allocated by these accounts. Don’t miss out on this opportunity to save. Keep the invoices or billing statements for the care, along with records showing payment such as bank statements or credit card bills.

Find Out: 6 Things Every Parent Should Know About the Child Tax Credit

5. Student Loan Interest

Parents with dependents who have student loan debt can deduct the interest they paid on their child’s loans throughout the year. Alternatively, if you are paying off your own student debt, you should receive Form 1098-T from your student loan lender showing how much interest you paid, so you can deduct the qualifying amount on your tax return.

Unfortunately, you can only deduct up to $2,500 of interest each year. And, if your college education paid off in the form of a job with significant income, your deduction might be limited or even eliminated.

6. College Tuition and Training

Still in school or taking classes to get a graduate degree or improve job skills? You might be able to deduct some of your expenses by claiming another useful tax credit  the Lifetime Learning credit, which allows you up to $2,000 in the form of a tax credit if your income doesn’t exceed certain limits. To claim the credit, you will need to file Form 8863.

7. Job Search and Moving Expenses

Job loss and career change aren’t always a bad thing, especially if you were looking for a job last year and had to travel for interviews. You can deduct those job search costs in amounts up to 2 percent of your AGI. But the deduction only applies if you’re looking in the same job field and this isn’t your first job.

First-time job seekers, however, can claim moving expenses, if applicable. The new job must be more than 50 miles from your old place of residence. You can claim the cost of moving your belongings to the new place, gas to drive to your destination and parking and toll fees — as long as your employer does not reimburse you.

8. Energy-Saving Home Improvements

Making your home more energy-efficient can help you score a tax credit known as the Residential Energy Efficient Property credit. When you choose to install alternative energy equipment in your home, you’ll receive a credit for 30 percent of the cost of the installation — including labor — of qualified residential equipment like solar hot water heaters, wind turbines and solar electric equipment.

9. Military Reserve Travel

For members of the National Guard or military reservists, you can deduct partial travel expenses for attending meetings or drills more than 100 miles from home, even if you don’t itemize. You can treat all of your lodging costs and half your meal expenses as tax write-offs — and the 2 percent AGI limit does not apply.

10. Self-Employment Tax Deductions

Self-employed taxpayers don’t get a W-4 and can’t take advantage of certain payroll tax deductions, but they can take advantage of many of the same small-business tax deductions from 2016. For example, self-employed individuals who work from home or use their home as part of their business can treat a portion of mortgage or rental expenses, utility costs, maintenance and other expenses as tax write-offs.

Self-employed individuals can also deduct the employer-equivalent portion of their self-employment tax in figuring their AGI. Typically, this works out to one-half of calculated self-employment tax. Check the official site for the IRS to find out about more the best tax deductions in this category.

Find Out: How to File Self-Employment Tax Forms

11. Reinvested Dividends

Many investors have their mutual fund dividends automatically reinvested. It’s a solid strategy that results in owning an increasing number of shares in your mutual funds. However, it is easy to end up forgetting that these dividends are taxed when paid and that reinvesting is actually just buying new shares.

As a result, investors need to be careful that their dividend reinvestment is reflected in the cost-basis of their shares. And don’t forget: You can deduct the service charge subtracted from your reinvested dividends.

12. Earned Income Credit

You might qualify for the Earned Income Tax Credit if you have a lower income. EITC is sometimes overlooked because you have to file a tax return and claim the credit even if you owe no taxes or have no taxable income for the year. Unlike many tax credits and deductions, you can claim EITC to get money back even if you did not pay any taxes or have any tax withholdings.

13. Mortgage Interest and Remodeling

Although most people know about the biggest tax deduction for homeowners –mortgage interest — other deductions do exist. When itemizing, taxpayers who remodeled their current home can deduct state sales tax for building materials.

Also, individuals or couples who bought a house during the tax year should be sure to claim the interest paid on their mortgage points and homeowners who paid points when they refinanced their mortgage might also be able to deduct them.

Next Up: Are Closing Costs Tax Deductible?

Remember to always keep your receipts and documentation, so that when it comes time to file your federal taxes and state taxes, you’re prepared. Not only should you have what you need, you should also be sure to not miss out on this list of deductions and credits you deserve.