4 Tax Deductions People Are Missing This Year

Missed deductions do not make you noble. They make you overpay.

This year's most missed deductions are probably the ones people think they already understand.

That's the trap.

The IRS says Schedule 1-A is used to claim four major deduction areas for this filing season: qualified tips, qualified overtime, qualified passenger vehicle loan interest, and the enhanced senior deduction.

And one of the biggest mistakes this season is assuming a deduction only matters if you itemize. The IRS says these deductions may be available to eligible taxpayers whether they itemize or take the standard deduction, and if they qualify, they are claimed on Schedule 1-A, not on Schedule A.

Here are the deduction areas the IRS is emphasizing:

• Up to $25,000 for qualified tips
• Up to $12,500 for qualified overtime, or $25,000 for joint filers
• Up to $10,000 for qualified passenger vehicle loan interest
• Up to $6,000 for an eligible senior, or $12,000 if both spouses qualify and file jointly

Each deduction comes with its own eligibility rules and income phaseouts, which is exactly why taking the headline at face value is risky.