In recent years, fewer taxpayers have itemized deductions due to changes introduced by the Tax Cuts and Jobs Act (TCJA). The TCJA increased the standard deduction and limited or suspended certain itemized deductions, set to expire after 2025. However, with the current political landscape, these provisions may be extended or expanded. If you plan to itemize deductions for your 2024 federal tax return or are close to the standard deduction threshold, maximizing your deductions is crucial. Here are eight hidden tax deductions that could lower your tax bill. Maximize your refund by claiming these overlooked breaks. you might be eligible for:

Charitable Travel

If you incur travel expenses on behalf of a qualified charitable organization, you can generally deduct your unreimbursed out-of-pocket costs. For example, if you fly to a meeting to represent a charity, you can deduct the following costs:

• Airfare,
• Lodging,
• Meals while you’re away from home, and
• Local transportation (for example, taxis or ride services between the airport and hotel).

Suppose you drive your personal vehicle for charity-related travel. In that case, you can write off your actual expense attributable to the charitable travel, supported by records, or use a simplified “standard rate.” The standard rate is statutorily set (and not indexed for inflation) at only 14 cents per mile (plus related tolls and parking fees).

Casualty Losses

The TCJA made changes to the rules for personal casualty and theft loss deductions for tax years 2018 through 2025. However, a new law passed in late 2024 provided much-needed relief to some victims of disasters occurring during part of this time period. Let’s take a look at the rules.

TCJA rules: Between 2018 and 2025, you can’t deduct casualty losses unless the disaster occurs in an area declared a disaster by the President of the United States. But the full amount of the loss isn’t deductible for federal income tax purposes.

Under the general TCJA rules, to calculate the casualty loss deduction for personal-use property in an area declared a federal disaster, you must:

• Subtract any insurance proceeds.
• Subtract $100 per casualty event.
• Subtract 10% of your adjusted gross income (AGI) for the year you claim the loss deduction.

New law rules: On December 12, 2024, then-President Biden signed the Federal Disaster Relief Act. The law introduced new tax relief for victims of certain recent disasters. The relief applies to presidentially declared disasters that began on or after December 28, 2019, and on or before December 12, 2024. These taxpayers can deduct personal casualty losses without itemizing deductions on Schedule A. In addition, a casualty loss from these qualified disasters doesn’t need to exceed 10% of AGI. But the $100 limit per casualty is increased to $500.

Overall, the Federal Disaster Relief Act will allow more taxpayers to claim casualty loss deductions and to claim higher deductions. There may be opportunities for some taxpayers to file amended returns and claim refunds. Contact your tax advisor if you were a victim of a disaster to find out what tax relief is available.

These are the rules for personal casualty losses. Business casualty losses generally offer more favorable tax deduction terms compared to personal casualty losses, as they’re not subject to the same limitations.

Important: If you incur a disaster-area loss, you can elect to claim the loss on the tax return for the year before the year of the event to obtain faster tax relief. Therefore, you may deduct a loss suffered in 2024 on either your 2024 return or a 2023 amended return and you have until six months after the initial due date of the 2024 tax return to decide on this.

Student Loan Interest

Generally, you can’t deduct any personal interest paid during the year for such items as credit card debt or car loans. But you may write off up to $2,500 of student loan interest as an above-the-line adjustment on your personal return whether you itemize or not.

This deduction is available only to the person legally obligated to repay the loan. Examples of qualified expenses include:

• Tuition and fees,
• Room and board, and
• Books, supplies and equipment.

However, the deduction is phased out based on modified adjusted gross income (MAGI), and the amounts aren’t that high. For 2024, the phaseout begins at $80,000 for single filers and $165,000 for married couples who file jointly.

State Sales Tax

The TCJA caps the annual deduction for state and local tax (SALT) payments at $10,000 for 2018 through 2025. Accordingly, many taxpayers residing in states with high property or income tax rates may lose some tax benefit from their SALT payments.

The SALT deduction covers the following items:

• Property taxes, and
• Income taxes or sales taxes.

If you live somewhere with low or no state income tax, you might opt to deduct state sales tax, rather than state income tax. The state sales tax deduction equals:

• Actual sales tax paid in this tax year supported by records, or
• A flat amount from a simplified IRS table based on the state and your family size (plus the sales tax paid on certain large purchases, such as cars and boats).

It often makes sense to retain your sales tax receipts for the year to determine which method will provide the higher SALT deduction.

Medical Expense Deductions

If you itemize, your deduction for unreimbursed medical expenses is limited to the excess above 7.5% of your AGI. Depending on your situation, this is a difficult — but not impossible — tax hurdle to clear. Make sure to add up all your qualified expenses, including amounts you paid for a relative you support. For instance, if you pay an aide to care for an elderly parent who qualifies as your dependent, the cost counts toward the medical deduction, even if the caretaker isn’t a licensed professional.

Annual medical expenses can add up, especially if you’re older, have a serious medical condition or support several dependents. Examples of some commonly encountered costs that count as medical expenses for itemized deduction purposes are:

• Acupuncture,
• Ambulance,
• Artificial limb,
• Artificial teeth,
• Bandages,
• Braille books and magazines,
• Car (cost of special equipment so a disabled person can drive),
• Chiropractor,
• Contact lenses plus wetting and cleaning solutions,
• Crutches,
• Dental care,
• Diagnostic devices,
• Drugs (prescription only except for insulin),
• Eyeglasses,
• Eye surgery,
• Guide dog,
• Hearing aid,
• Home improvements for medical purposes (to the extent they don’t add to the value of your home),
• Hospitalization,
• Insulin,
• Insurance premiums for health coverage, including age-based premiums for qualified long-term care insurance,
• Laboratory fees,
• Long-term care services,
• Meals (while staying in hospital or similar facility),
• Medicare insurance premiums,
• Nursing home,
• Nursing services,
• Operations,
• Optometrist,
• Osteopath,
• Oxygen,
• Psychiatric care,
• Psychoanalysis,
• Stop-smoking program,
• Therapy,
• Transplant,
• Weight-loss program (if part of treatment for a specific disease or condition, such as obesity),
• Wheelchair,
• Wig (if hair is lost due to medical condition or treatment), and
• X-rays.

Transportation to receive medical care also may be included at a rate of 21 cents per mile for 2024 and 2025.

Home Improvements

Under the TCJA, you currently can deduct mortgage interest on the first $750,000 of acquisition debt, down from $1 million under prior law. The TCJA also suspends any deduction for mortgage interest paid on home equity debt for 2018 through 2025. Previously, you could deduct interest on the first $100,000 of home equity debt.

Acquisition debt refers to loan proceeds used to “buy, build or substantially improve” a qualified residence. Thus, if you took out a home equity loan in 2024 to, say, install an in-ground pool at your home, the interest may qualify as deductible acquisition debt interest (if it’s within applicable limits).

Points Paid on a Home Mortgage

If you acquired a home last year, you may have paid the lender one or more “points” for a more favorable interest rate. Each point is equal to 1% of the mortgage principal. For example, two points on a $500,000 loan is $10,000 (2% of $500,000). Points are generally deductible as acquisition debt.

However, if you refinance an existing acquisition debt instead of taking out a new loan, you must amortize points paid on the refinanced mortgage over the life of the loan. So, if you paid $10,000 in points to refinance a 10-year loan in 2024, you can deduct only $1,000 per year for the 2024 through 2033 tax years.

Jury Duty Deductions

In some cases, an employer may pay an employee’s regular salary or offer leave pay while he or she is on jury duty but then require the employee to turn over any payments received from the courts. As usual, the salary is taxable to the employee and jury-duty payments to the employer are deductible.

But the amount you give to your employer is reported as an adjustment to income on your tax return. In addition, any reimbursements received for transportation, parking fees and meals are tax-exempt. (If you’re not employed or don’t turn over jury duty payments to an employer, the amount earned from jury duty is taxable income and must be reported on your tax return.)

Maximize Your Deductions

The IRS began accepting 2024 federal income tax returns on January 27, 2025, and the deadline to file or extend your 2024 return is April 15, 2025. Contact your tax advisor to discuss strategies to minimize your tax burden by claiming all the deductions you’re entitled to under the law.