Keep More of Your Money With These Tax Deductions

Preston Rosamond |

Many taxpayers approach filing season with the goal of simply getting it done—often relying on familiar deductions and credits. However, taking the time to explore less common tax breaks can lead to significant savings in your pocket. Here are some frequently overlooked deductions and credits that may help reduce your tax liability.

Tax Deductibles vs. Tax Credits

Tax deductions reduce the amount of taxable income you incur before taxes are assessed. With the right deductions, you could potentially move into a lower tax bracket.

 

By contrast, tax credits apply after your liability has been calculated, reducing your overall tax bill. Credits are based on income, expenses, and other factors. Every credit dollar reduces your tax bill by the same amount.

 

Wealthy, high-income taxpayers may benefit more from deductions, while lower-income families may earn more from credits. Shrewd taxpayers take advantage of both. 

State and Local Tax Deductions

The breaks most taxpayers ignore involve the imposition of state sales taxes. With the wild variance of tax laws from state to state, it’s easy to see how they get missed. However, they can add up.

States Without Income Tax

Taxpayers in states without income tax may be able to deduct major purchases up to the limits outlined by the IRS. Alternatively, they can track their sales tax incurred last year and base their deductions on those.

States With Income Tax

Taxpayers in states that charge income tax also must choose between those two structures (income vs. sales taxes). However, the income tax option is usually best. You can deduct up to $10,000 (or $5,000 for married couples filing separately) of combined property taxes and income or sales taxes.

Individual and Home-Based Tax Deductions and Credits

Many of the best opportunities for saving on taxes are centered around life and home. The following are some of the more overlooked or forgotten breaks.

Mortgage Interest Reduction

As of the 2025 tax year, homeowners who itemize their deductions can continue to deduct mortgage interest on loans up to $750,000. However, the deduction for mortgage insurance premiums expired after the 2021 tax year and is no longer available.

 

Note that the $750,000 limit on deductible mortgage debt was established by the Tax Cuts and Jobs Act (TCJA) and is set to revert to the previous $1 million limit after 2025.

Renewable Energy Credits

Homeowners switching to renewable energy sources can write off certain expenses. You may be able to take up to 30% of the installation costs for installing solar panels, water heaters, or HVAC systems. You may also get a non-refundable credit for a new electric vehicle if it meets IRS guidelines (credit amounts range from $3,750 to $7,500).

Saver’s Credit

The saver’s credit helps low-to-medium-income taxpayers contribute to an IRA, 401(k), 403(b), and certain other retirement funds. The credit runs between 10% and 50% of up to $2,000 for each individual.

Charitable Contributions

If you itemize your deductions or donate to a charity via certain approved strategies then you may be able to deduct the total from your taxable income.

Education Deductions

The IRS facilitates continuing education with several learning tax credits:

American Opportunity Tax Credits

Students can claim the first $2,000 spent (and 25 percent of the next $2,000) on approved educational expenses, such as tuition, books, and school fees.

Lifetime Learning Credit

The lifetime learning credit helps post-graduates continue their education. They can claim 20% of the first $10,000 spent on expenses, to a maximum of $2,000.

Student Loan Interest

Taxpayers repaying their student loans can deduct the amount they paid in interest over the last year. The maximum you can claim in 2023 and 2024 is $2,500.

Business Tax Deductions

Business owners and self-employed individuals have numerous options for reducing their tax bills.

Self-Employed Expense Deductions

Self-employed individuals can write off select expenses, such as continuing education, retirement savings, mileage reimbursement, and certain kinds of health insurance. Those working out of residences may qualify for home-office deductions as well.

Small Business Owner Tax Deductions

Some of the most helpful deductions for small business owners include:

 

 

Check with your accountant to verify that you’re taking advantage of all applicable breaks.

Healthcare and Medical Deductions

You might qualify for certain expenses related to healthcare and medicine, including the following.

Medical Expense Deductions

If you itemize deductions, you may qualify to have certain medical expenses subtracted from your taxable income. Expenses must surpass 7.5% of your adjusted growth income.

HSA Contribution Deductions

If you’ve opened a health savings account (HSA), your contributions to the fund may be deductible.

Discover Hidden Tax Deductions and Credits

Many taxpayers in Marble, Texas, overlook these valuable deductions, credits, and tax breaks, but there may be even more opportunities available based on your situation.

For personalized guidance and to explore whether our services at The Rosamond Financial Group align with your financial needs, schedule a complimentary call today at 830-798-9400 or email solutions@rosamondfinancialgroup.com.

About Preston

Preston Rosamond is a financial advisor and the founder of The Rosamond Financial Group Wealth Management, LLC with over two decades of industry experience. He provides comprehensive wealth management and financial services to successful business owners, corporate executives, and affluent retirees who enjoy simplicity and seek a professional to help them pursue their goals. Preston personally serves his clients with an individual touch, a sincere heart, and his servant’s attitude is evident from the moment you meet him. Learn more about Preston or start the conversation about your finances with him by emailing solutions@rosamondfinancialgroup.com or schedule a call on his online calendar.