Every year, US citizens and residents are required to file a federal income tax return if they’ve earned more than the threshold. Income and expenses are reported to the IRS and can be filed electronically or by mail. The deadline for filing in 2026 is April 15, or June 15 for citizens or residents living elsewhere.
Filing taxes can be confusing and challenging, especially if you have multiple forms of income, investments, assets, and business ownership. Depending on annual income and expenses, some might owe money while others may receive a substantial return. Regardless of how much you make, there are several deductible line items that can help lower your taxable income and reduce your tax burden.
All American taxpayers can claim the standard deduction, a fixed amount adjusted each year for inflation, or list itemized deductions. The standard deduction for the 2025 tax year is $15,750 for single filers and $31,500 for married couples filing jointly. Itemized deductions are preferable if your qualifying expenses exceed these thresholds.
With that in mind, here's a look at some of the most common expenses you can deduct when filing your federal income tax return.
State Income or Sales Tax
If you're itemizing your deductions for your federal return, you can choose to include either state income or sales taxes. Most people would benefit more by deducting state income tax, although residents of the eight states with no income tax (Florida, Alaska, Nevada, New Hampshire, South Dakota, Texas, Tennessee, and Wyoming) should deduct sales taxes paid that year. Those who made substantial purchases, like a new luxury car, may also receive a bigger tax write-off by choosing to deduct sales taxes.
The 2025 limit for the State and Local Tax (SALT) deduction is $40,000, up from $10,000 in 2024. However, this only applies for individuals with a modified adjusted gross income of less than $500,000, or $250,000 for married couples filing separately.
Property Taxes
Property taxes are also deductible and are included in the SALT deduction limit of $40,000 for the 2025 tax year. You can deduct the property tax paid on your primary residence, vacation home, and other real estate you may own for investment purposes. In some cases, property maintenance and repair costs are also deductible.
Eligible Loan Interest
Mortgage interest can also be deducted on loan amounts that don't exceed a certain value—$1 million for mortgages taken out on or before December 15, 2017, and $750,000 for those taken out after that date.
Interest on student loan payments qualify for deductions up to $2,500. This can be particularly beneficial to young people, even those whose parents are paying off the loan, because the deduction can only be claimed by the person legally obligated to repay the loan. Married separate filers cannot claim student loan interest, however.
IRA Contributions
There are plenty of good reasons to start saving for retirement as soon as possible. By investing at an early age, you not only benefit from compound interest but also lower your taxable income. Qualifying deductions include contributions to individual retirement accounts (IRAs), solo 401(k) plans, and Simplified Employee Pension (SEP) and Savings Incentive Match Plan for Employees (SIMPLE) IRAs.
For the 2025 tax year, Americans 49 and younger can deduct up to $7,000 in IRA contributions. Those 50 and older can deduct an additional $1,000 in "catch-up" contributions.
Health Insurance Premiums
Health insurance premiums and medical and dental expenses can be deductible, but only for qualified expenses exceeding 7.5% of your adjusted gross income (AGI). For example, if your AGI is $80,000 and you have $10,000 in eligible medical expenses, 7.5% of your AGI equals $6,000. That means only $4,000 can count as an itemized deduction ($10,000 - $6,000).
The same formula applies to health insurance premiums paid with after-tax dollars. If you get health insurance from your employer and pay premiums via pre-tax payroll deductions, your taxable income has already been reduced. Self-employed individuals, meanwhile, may be able to deduct up to 100% of their health insurance premiums without the AGI restriction.
Self-Employed Business Expenses
People who are self-employed can also claim eligible business expenses if they are "ordinary" and "necessary," meaning they are commonly accepted in your industry and helpful for your business. These include costs for advertising, insurance, legal and professional services, and office space. You can deduct a percentage of your rent or mortgage interest, utilities, and property taxes if you use part of your home "regularly and exclusively" as office space.
Child and Dependent Care
You can also claim child and dependent care as long as you and your spouse have both earned income in the applicable tax year. The tax credit is based on combined income (if filing jointly) and the percentage paid to the qualified care provider, which may be a babysitter, daycare, nursery school, preschool, day camp, or dependent care facility. Dependents under care must be younger than 13 or have a qualifying disability. When filing, you're required to enter the care provider's Social Security or taxpayer identification number, name, and address on Form 2441 (Child and Dependent Care Expenses) and attach it to Form 1040.