9 Tax Deductions Middle-Class Americans Miss Every Year

Many Americans assume the best way to get out of tax debt is to take the standard deduction, which reduces their overall taxable income when tax season arrives. 

But depending on your individual circumstances, itemizing your deductions could be the more financially savvy choice, especially if you take advantage of some lesser-known, legitimate deductions.

Below, we list some crucial deductions that you should continue looking into this year if they apply to your personal situation.

If you use a portion of your home specifically and exclusively for work, you might be able to claim certain housing expenses on your tax return. Crucially, you can do so even if you rent instead of own.

While homeowners can use the home office deduction to write off a certain portion of mortgage interest and depreciation, renters may be able to deduct portions of their rent, utilities, or other related expenses. You can even claim deductions on mobile homes or boats as long as you use them (or certain portions of them) solely to run your business.

If you live in an area with high regional taxes, you might be able to claim those on your federal tax return. State property tax, income tax, and sales tax can all count toward the deduction.

In 2018, a $10,000 cap was imposed on the amount of state and local taxes you can deduct. As of this tax year, though, the cap is $40,400 for families making $505,000 or less. (Those making more than $505,000 have a phased-out cap down to $10,000.)

Do you spend a disproportionate amount of your time and money traveling to and from medical appointments?

Costs like mileage, bus fares, tolls, and parking can all be deducted, but only if the total costs come to more than 7.5% of your adjusted gross income (AGI) for the tax year. The deductions also apply to medicare expenses you incur on behalf of your minor child or dependent.

Depending on how much dental work you need done in a given year, you might benefit from deducting qualifying dental expenses if they are medically necessary. As with medical expenses, you can deduct dental costs for yourself, your spouse, and your dependents. Artificial teeth, treatment for dental disease like gingivitis, fluoride treatments, and regular dental care can all be written off.

However, please note that some optional treatments, such as teeth whitening, are not tax-deductible.

As a teacher, you likely help furnish your own classroom out of pocket. If your school hasn't reimbursed you for certain expenses, you can deduct up to $300 worth of qualifying expenses on your taxes this year. Note that teachers of physical education and health courses can only deduct athletics-related classroom expenses.

Are you on active duty with any branch of the armed forces? If a military order and permanent change of station required you to pay for a move this tax year, you can deduct any unreimbursed costs associated with the move, including the cost of moving personal items and household goods.

You may also be able to deduct the cost of lodging, such as staying at motels while you drive across the country to your new station.

The American Opportunity Tax Credit (AOTC) helps students pursuing higher education reduce their costs. You only qualify if your school is eligible for participation in the student aid program supported by the U.S. Department of Education.

You can include the cost of required textbooks and supplies, as well as fees associated with required student activities, in your deduction. However, you can't deduct education-related insurance, room and board, or transportation costs.

Since many former students automate their loan payments, they don't pay particular attention to how much of the payment goes toward the principal and how much toward interest.

However, if you paid up to $2,500 in interest on your student loans this year, you can deduct that amount from your taxes. Take a close look at your payments to figure out if you've paid enough in interest to merit deducting it from your taxes.

Contributing money to charitable causes is just one way people donate to their favorite nonprofits. For instance, you might travel as a chaperone for a nonprofit youth group, host a foreign exchange student at your home for a semester, or purchase and clean your own uniform required for volunteering.

All these contributions can be counted toward your itemized deductions, though you'll need to carefully, meticulously track these expenses and verify that the group you contribute to is a qualified charity.

Saving receipts throughout the year, understanding relevant tax deductions, and working with an accountant to file taxes on time and correctly are all great ways to get ahead financially.

If you're wondering how else to keep your taxes low, a CPA or other tax professional can look over your financial documents and give you clear, personalized recommendations specific to your situation.