March 2026
"Can I deduct that?" is one of the most common questions in tax. And the honest answer, more often than people want to hear, is: it depends — and sometimes, no.
This article covers the deductions that actually matter for most filers, explains the ones that are frequently misunderstood, and addresses the category people least expect: things that used to be deductible, or sound like they should be, but aren't.
Before any deduction discussion makes sense, you need to understand this choice — because it determines whether most individual deductions matter to you at all.
Every taxpayer gets to choose between two methods:
The standard deduction is a flat amount set by the IRS each year. For 2024, it's $14,600 for single filers and $29,200 for married filing jointly. You claim it automatically with no documentation required.
Itemizing means adding up specific deductible expenses — mortgage interest, charitable contributions, state taxes, and others — and deducting the actual total instead. This only makes sense if your itemized total exceeds the standard deduction.
The 2017 tax law nearly doubled the standard deduction, and the result was that roughly 90% of Americans now take it. If your mortgage is modest, you live in a low-tax state, and you don't give significantly to charity, the standard deduction almost certainly beats itemizing — and most of the individual deductions below won't directly affect your return.
That said, many deductions exist above the line — meaning they reduce your adjusted gross income before the standard deduction is even considered. Those matter to everyone, itemizer or not.
These reduce your AGI directly and don't require itemizing. They're often overlooked, which is a shame because a lower AGI also expands your eligibility for credits and other deductions that phase out at higher incomes.
Student loan interest — up to $2,500 per year, subject to income phase-outs. If you're paying off student loans and your income is under the threshold, this deduction is straightforward and commonly missed.
Traditional IRA contributions — up to $7,000 per year ($8,000 if you're 50 or older). Deductibility depends on your income and whether you or your spouse has access to a workplace retirement plan. Even if your contribution isn't fully deductible, a non-deductible IRA contribution may still be worth making for other reasons.
HSA contributions — if you're enrolled in a qualifying high-deductible health plan, contributions to a Health Savings Account are fully deductible. The 2024 limits are $4,150 for self-only coverage and $8,300 for family coverage. HSA contributions are arguably one of the best deductions in the tax code — triple tax-advantaged, with no use-it-or-lose-it rule.
Self-employed health insurance premiums — if you're self-employed and pay for your own health insurance (including dental and vision), the premiums are fully deductible. This includes coverage for a spouse and dependents. The deduction is limited to your net self-employment income.
Half of self-employment tax — self-employed individuals pay both the employer and employee share of Social Security and Medicare. The employer half (7.65%) is deductible above the line. It's calculated automatically but only if someone's actually running the numbers.
Alimony paid under pre-2019 agreements — for divorce agreements finalized before January 1, 2019, alimony payments are deductible by the payer. The 2017 tax law eliminated this deduction for agreements signed after that date. If your divorce was finalized in 2018 or earlier, this may still apply.
Educator expenses — teachers and other eligible educators can deduct up to $300 in out-of-pocket classroom expenses. Not large, but real.
SEP-IRA and Solo 401(k) contributions — self-employed individuals can contribute significantly more than the standard IRA limits. SEP-IRA contributions can go up to 25% of net self-employment income, up to $69,000 for 2024. These contributions are fully deductible and can be made up until the filing deadline, including extensions.
If you're among the roughly 10% of filers who itemize, these are the deductions that get you there.
Mortgage interest — interest on up to $750,000 of mortgage debt on your primary and secondary residence is deductible. If your mortgage predates December 15, 2017, the limit is $1 million. The interest is reported on Form 1098 by your lender. Points paid when originating a mortgage may also be deductible, either immediately or over the life of the loan.
State and local taxes (SALT) — you can deduct state income taxes or state sales taxes (not both) plus property taxes, capped at a combined $10,000 per year ($5,000 if married filing separately). This cap, introduced in 2017, significantly reduced the value of this deduction for people in high-tax states like New York, California, and New Jersey. Prior to 2018, there was no cap.
Charitable contributions — cash donations to qualifying organizations are deductible up to 60% of your AGI. Noncash donations (clothing, household goods, vehicles) follow different rules. Donations of appreciated stock directly to a charity are deductible at full market value without triggering capital gains tax — often the most tax-efficient way to give. Documentation requirements are strict: anything $250 or more requires written acknowledgment from the charity.
Medical and dental expenses — only the portion exceeding 7.5% of your AGI is deductible. For most people, this threshold is high enough that the deduction doesn't materialize. But in years with major medical events — surgery, extended care, significant dental work — it can add up. Qualifying expenses include premiums paid after-tax, out-of-pocket costs, prescription drugs, and medically necessary travel.
Casualty and theft losses — this deduction was significantly restricted in 2017 and now only applies to losses from federally declared disasters. Personal theft or non-disaster casualty losses are no longer deductible for most taxpayers.
If you're self-employed, a freelancer, or run a business, you deduct business expenses on Schedule C before the self-employment income reaches your personal return. These are not itemized deductions — they reduce your business income directly.
Ordinary and necessary business expenses is the standard the IRS applies. The expense must be common in your industry and helpful for your business. Within that, the range of deductible items is broad:
What doesn't qualify: costs that are personal in nature, startup costs before you're in business (handled differently), or expenses that are lavish or extravagant relative to the business context.
This is where well-intentioned filers (and overconfident software users) get into trouble. Some of these were eliminated by the 2017 tax law. Others are simply common misconceptions. All of them generate questions.
This one surprises people. Before 2018, employees who had job-related expenses their employer didn't reimburse — mileage to client sites, work tools, professional dues, a home office — could deduct those costs as a miscellaneous itemized deduction.
The 2017 tax law eliminated this deduction entirely for employees through at least 2025. If your employer doesn't reimburse you, you eat the cost. There is no federal deduction.
This affects remote workers especially hard. Working from home for an employer does not entitle you to a home office deduction, even if your employer requires it. The deduction is gone for employees under current law.
(Self-employed individuals are unaffected — business expenses on Schedule C were never subject to this limitation.)
Also eliminated in 2017. Prior to the law change, fees paid to financial advisors for managing taxable accounts, and fees paid to tax preparers, could be deducted as miscellaneous itemized expenses above a 2% AGI floor. Both were wiped out by the same reform that eliminated employee business expenses.
If you pay $2,000 a year in investment advisory fees or $500 to have your taxes prepared, there is no federal deduction for that under current law.
Worth repeating because so many people got this wrong during the remote work era. The home office deduction requires that you be self-employed. An employee working from home — even full-time, even because their company closed its office — cannot deduct home office expenses on a federal return under current law. A handful of states allow it; the federal government does not.
Prior to 2018, moving expenses for a job-related move were deductible. The 2017 law eliminated this deduction for most taxpayers. The only exception is active-duty military members moving under orders. Everyone else: not deductible.
Legal fees related to your personal life — divorce, custody disputes, estate planning, buying a home — are not deductible. Legal fees related to a business or to income-producing activity may be deductible, but the personal side of your legal life is firmly not.
No matter how far you drive to work, how expensive public transportation is, or how inconvenient your commute is, commuting between your home and your regular workplace is not deductible. It's considered a personal expense. Business travel — driving between job sites during the workday, travel to client locations, etc. — is a different matter and may be deductible.
Unless a gym membership is specifically prescribed by a doctor to treat a diagnosed medical condition, it's personal and not deductible. The general wellness argument — "I need to stay healthy for work" — doesn't meet the IRS standard. Similarly, health foods, vitamins, and fitness equipment purchased for general wellness are personal expenses.
Clothing is not deductible simply because you only wear it to work or because your employer requires business attire. To be deductible, clothing must be a required uniform that is not suitable for everyday wear. A nurse's scrubs, a firefighter's gear, or a required branded uniform qualifies. A suit you wear to client meetings, even if you only wear it for work, does not — because you could theoretically wear it elsewhere.
Donations to political candidates, political parties, or political action committees are never deductible, regardless of how the organization is structured. This is a firm rule with no exceptions.
Membership dues for country clubs, golf clubs, athletic clubs, and social organizations are not deductible — even if the primary use is business entertainment. The IRS specifically excludes these. Business meals at a club may still be 50% deductible, but the membership itself is not.
Many expenses have both personal and business components. The deductible portion is limited to the business use. A phone you use 30% for business and 70% personally is 30% deductible. A vacation where you work two days and vacation for five is not a "business trip." The IRS is well aware of the temptation to reclassify personal expenses as business ones, and the line matters.
Gambling losses are deductible — but only up to the amount of gambling winnings you report, and only if you itemize. You cannot use gambling losses to create a tax loss or offset other income. If you won $5,000 and lost $8,000, you can deduct $5,000 in losses, not $8,000.
Fines paid to government entities — traffic tickets, IRS penalties, regulatory fines — are not deductible. The IRS doesn't allow a deduction for the cost of violating the law.
Deductions have rules, limits, and expiration dates. The 2017 tax reform wiped out or capped several deductions that had existed for decades, and many taxpayers are still operating on old assumptions. The flip side is that the same law created and expanded other opportunities — particularly for business owners and investors — that are underutilized.
Knowing what's available is half the battle. The other half is knowing your specific numbers well enough to use them strategically — which deductions you're close to crossing a threshold on, which expenses you should be tracking, and what decisions made before December 31st change your April outcome.
That's the work that happens before you file, not during.
Wondering whether you're using every deduction you're entitled to? Contact us — a quick conversation often reveals more than people expect.