Don’t miss out on these overlooked 2024 tax deductions

Are you potentially overpaying on your taxes by missing out on deductions?

Here’s a rundown of ten often overlooked deductions that can help you keep more money in your wallet.

1. State Sales Taxes

For residents in states without an income tax—such as Florida, Texas, and Wyoming—deducting state and local sales taxes can be beneficial. Taxpayers can choose between deducting state income taxes or sales taxes. If you're in a no-income-tax state, you have two options to claim the sales tax deduction:
• Use IRS tables to determine your deduction.
• Track your sales tax payments throughout the year, including significant purchases like vehicles or home renovations. Just remember, the total for all state and local taxes is capped at $10,000.

2. Reinvested Dividends

While not a traditional deduction, reinvesting dividends can significantly impact your taxable income. When dividends are reinvested, they increase your tax basis in the investment, reducing your taxable capital gains when you sell. This little-known detail can lead to substantial tax savings.

3. Out-of-Pocket Charitable Contributions

Donations extend beyond just cash gifts. Keep track of out-of-pocket expenses incurred while volunteering, such as ingredients for meals or stamps for fundraising. Additionally, if you drive for charity, you can deduct 14 cents per mile. These small expenses can add up and make a difference on your tax return.

4. Student Loan Interest

Previously, only those who directly paid off student loans could claim a deduction. Now, if someone else pays your student loans, the IRS considers it as if you paid it yourself, allowing you to claim up to $2,500 in deductions—provided you’re not claimed as a dependent.