Don’t Miss These 24 Simple Tax Deductions That Don’t Require Itemizing

When tax time comes, many people think that itemizing is the only way to save money on taxes. But did you know there are many deductions you can claim without the trouble of itemizing?

Actually, over 87% of taxpayers choose the standard deduction, which still allows for good savings. If you’re paying student loans or putting money into your retirement, these deductions can lower your taxable income and increase your refund.

In this article, you’ll find out 24 easy tax deductions to still save big. Ignoring these deductions means leaving money on the table, something no one wants, especially in today’s economic climate. 

How much could you save this tax season by skipping itemization? You might be surprised by how much you can keep in your pocket, and we’d love to hear your thoughts in the comments!

And of course check with your CPA for your specific situation.

Retirement Savings Contributions Credit

The Retirement Savings Contributions Credit, also known as the Saver’s Credit, offers a tax credit to low- and moderate-income taxpayers who contribute to a retirement account. This credit can be claimed without itemizing deductions and is worth up to $2,000.

This credit rewards those who save for retirement, providing an extra tax benefit for taking steps to secure your financial future. By reducing your tax liability, the Saver’s Credit encourages more people to save for retirement.

IRA Contributions

You can deduct traditional IRA contributions without listing them separately, which helps you save for retirement and reduce your taxable income. In 2024, you can contribute up to $6,500 to a traditional IRA, or $7,500 if you’re 50 or older.

If your income qualifies, this deduction can greatly reduce your tax bill. Saving for retirement is important, and this deduction gives you a tax benefit right away.

By lowering your taxable income with IRA contributions, you can have a more secure financial future and enjoy tax savings now.

Self-Employment Tax Deduction

Self-employed people can subtract half of their self-employment taxes without having to list expenses one by one. The IRS knows that self-employed workers pay both the employer and employee parts of Social Security and Medicare taxes, so this deduction helps make that cost smaller.

This deduction is useful because it lowers your adjusted gross income, which can then reduce the total amount of tax you owe. For freelancers, contractors, and small business owners, this deduction makes paying self-employment taxes a bit easier.

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Qualified Business Income Deduction

If you work for yourself or own a business that passes income to you, you might be able to use the Qualified Business Income (QBI) deduction. This lets you subtract up to 20% of your business income without needing to list each expense, but there are certain rules to follow.

Whether you can use the QBI deduction depends on how much money you make and the kind of business you have, with some limits for those with higher earnings. Every self-employed person should check the IRS rules carefully to see if they qualify.

The QBI deduction is very helpful for small business owners because it can lower the amount of income that is taxed. Using this deduction can reduce the taxes you owe and give you extra money to put back into your business.

Student Loan Interest Deduction

The student loan interest deduction allows taxpayers to deduct up to $2,500 in interest paid on qualified student loans. This deduction helps those with qualifying education debt reduce their taxable income.

For 2024, the deduction begins phasing out for incomes over $75,000 (or $155,000 for joint filers). Individuals with MAGI above $90,000 ($185,000 for joint filers) do not qualify.

For those paying off student loans, the interest deduction can help alleviate the financial burden by lowering the amount of income subject to tax.

Educator Expense Deduction

Teachers and educators can deduct up to $300 in out-of-pocket expenses for classroom supplies. The deduction is available to K-12 educators who work at least 900 hours per school year. 

While the deduction remains $300 for 2024, recent pandemic-related legislation briefly raised it to $600. This deduction provides some tax relief for teachers’ personal spending on classroom needs.

While the amount may seem small, it can add up over time and provide valuable tax savings.

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Health Savings Account (HSA) Contributions

Contributions to a Health Savings Account (HSA) are deductible even if you take the standard deduction. HSAs are available to individuals with high-deductible health plans, and the money contributed to the account can be used for qualifying medical expenses.

An HSA provides a triple tax advantage. Contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are also tax-free. This makes it a valuable tool for reducing both medical costs and taxable income.

Military Moving Expenses Deduction

Active-duty military members can subtract certain moving costs when they have to move for their job. This tax break is only for active-duty service members to help reduce money stress during moves.

Because of the Tax Cuts and Jobs Act, most people can no longer claim moving expenses. Only active-duty military on official orders can still use this deduction without needing to list other expenses.

This moving cost deduction helps lower the money pressure that comes with moving. Expenses like travel, places to stay, and moving things can be expensive, and this deduction helps military families pay for those costs.

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Jury Duty Pay Deduction

If you have to give your jury duty pay back to your employer, you can subtract that amount from your taxable income without listing other expenses. This deduction helps reduce the effect of lost earnings while you serve on a jury.

Jury duty is an important responsibility, but it can cause money problems for workers. This deduction from the IRS makes sure people don’t lose money for doing their civic duty.

Gambling Loss Deduction

You can deduct gambling losses up to the amount of your winnings without needing to itemize. This deduction applies to both professional and casual gamblers, as long as the losses can be substantiated.

While gambling can be risky, the ability to deduct losses helps mitigate some of the financial risk. Keep records of your wins and losses to take advantage of this deduction if you gamble regularly.

Adoption Credit

For those who have adopted a child, the adoption credit can provide significant tax relief. This credit helps offset the costs of adoption, and you don’t need to itemize deductions to claim it. 

For 2024, the maximum adoption credit is $15,960 per child, which can make a big difference for adoptive families. This credit is designed to alleviate the financial burden of adoption, covering expenses like legal fees, travel, and adoption fees. 

It is a valuable benefit that provides much-needed support to families going through the adoption process.

Mortgage Interest Credit

Homeowners with low incomes may qualify for the mortgage interest credit, which reduces their tax liability based on mortgage interest paid. This is different from the mortgage interest deduction, and you don’t need to itemize to claim it.

This credit helps make homeownership more affordable for low-income families, reducing the overall cost of home loans. It’s a useful benefit for those who qualify, providing valuable tax relief on mortgage payments.

Health Insurance Premiums for the Self-Employed

Self-employed people can subtract health insurance costs without having to list other expenses. This rule covers payments for medical, dental, and approved long-term care plans.

This is very helpful for business owners and freelancers who buy their own health insurance. It lowers the amount of income they have to pay taxes on, which can cut their total tax bill a lot.

Educator Professional Development Expenses

In addition to supplies, teachers can also subtract costs for training courses. This deduction is for ongoing education needed to keep certification or improve teaching skills.

Even if the amount is small, it can still save money. Teachers gain by lowering their taxable income while working on their careers.

Penalty on Early Withdrawal of Savings

Taking out money early from a certificate of deposit (CD) or savings account usually means you will pay a fee. The good news is that this fee can be subtracted from your taxable income, even if you do not list other deductions.

While this fee takes away some of your savings, the tax break can help make up for some of that loss. This gives a bit of help to people who need to get to their money before the end of the term.

Alimony Paid Deduction

Taxpayers paying alimony under agreements finalized before 2019 may still deduct those payments. The deduction reduces taxable income, providing tax relief for individuals with qualifying alimony obligations.

This benefit only applies to divorce agreements finalized by December 31, 2018. Alimony payments under newer agreements do not qualify for a deduction, following recent IRS changes.

The deduction helps lower the financial burden for individuals who are making alimony payments. By reducing taxable income, it ensures that the payer receives some financial benefit.

Casualty and Theft Loss Deduction

Taxpayers can deduct casualty and theft losses if they occur in a federally declared disaster area. For losses outside of these areas, you must itemize deductions to claim them, according to the Tax Cuts and Jobs Act.

If you’ve suffered property damage in a federally declared disaster, this deduction can provide some financial relief by reducing your taxable income and helping offset the costs of recovering from such events.

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Contributions to SEP IRA

Self-employed people can put money into a Simplified Employee Pension (SEP) IRA and subtract those amounts from their taxes without needing to list each expense. These contributions lower taxable income and help save for retirement.

This deduction gives big tax benefits to small business owners and freelancers. It allows them to save for retirement now and get a tax break at the same time.

Health Insurance Premium Tax Credit

People with low or moderate income who buy health insurance through the Marketplace may qualify for a premium tax credit. This credit reduces the monthly cost and can be used without needing to list expenses.

The credit helps make health insurance more affordable by providing fast financial support and lowering the amount paid each month.

Tax-Free Employer Assistance for Education

If your employer provides tuition reimbursement, you can receive up to $5,250 in tax-free assistance annually. This benefit doesn’t require itemizing and helps cover the cost of education.

It’s a valuable opportunity for employees to further their education without increasing their taxable income. Employers also benefit by supporting staff development without creating additional tax liabilities for their workers.

Union Dues Deduction for Certain Employees

Employees in certain fields, like education and transportation, can subtract union dues from their taxes without listing each expense. These deductions help cover the cost of being part of a union.

Union members gain by lowering their taxable income, which can cut down the total taxes they owe. This deduction helps workers in unions who pay dues out of their own pockets.

Lifetime Learning Credit

The Lifetime Learning Credit helps taxpayers offset the cost of higher education, covering tuition and certain fees. This credit doesn’t require itemizing and offers up to $2,000 annually per household.

Although, eligibility for this credit is income-restricted, phasing out for higher MAGI levels. Taxpayers should review their income levels to determine if they qualify to claim it fully.

This credit benefits taxpayers who take courses to improve their skills. It’s a useful option for individuals investing in their education, especially for career advancement.

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American Opportunity Tax Credit

The American Opportunity Tax Credit (AOTC) offers a tax credit for qualified education expenses. The credit is available for the first four years of post-secondary education and does not require itemizing.

It can cover up to $2,500 per eligible student, offering substantial savings. This credit is a great tool for parents or students to reduce education costs and tax liabilities.

Military Reservist Travel Expenses

Members of the National Guard and military reserves can subtract travel costs for their drill training. This deduction is available even if you don’t list each expense separately and includes lodging, food, and travel costs.

Service members gain by lowering the expenses for their training trips. It helps them handle the money needed to do their service duties.

Take These Tax Savings to the Bank

Maximizing your tax savings doesn’t need to be hard. By claiming these deductions without listing every expense, you can lower your taxable income and keep more money with you.

From paying off student loans to adding to your retirement, these tax benefits give an easy way to save. Don’t let the thought of itemizing stop you from getting the most out of your tax return.

With good planning, you can still get important deductions and a larger refund this tax season. Make sure to check these choices with your CPA before you file to find out how much you could save!

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