NEW YORK, NY – August 6, 2025 – With tax season looming and economic pressures mounting—especially for those like the reader with a $45,000 salary and $140,000 in a 401(k) planning for retirement—uncovering overlooked tax deductions can significantly boost your financial health. Many Americans leave money on the table by missing lesser-known deductions that can reduce taxable income and increase refunds. Here’s a comprehensive guide to tax deductions you might be missing for the 2025 tax year, complete with examples and practical tips to maximize your savings, drawn from IRS guidelines and expert insights.

Why Deductions Matter

Tax deductions lower your taxable income, reducing the amount you owe or increasing your refund. For someone earning $45,000 in the 22% tax bracket, every $1,000 in deductions saves $220 in taxes. The IRS offers two options: the standard deduction ($14,600 for singles, $29,200 for married filing jointly in 2025) or itemized deductions, where you list specific expenses. Itemizing makes sense if your deductions exceed the standard amount, but even those taking the standard deduction can claim certain “above-the-line” deductions. Below are key deductions often overlooked, tailored to common scenarios like the $45,000 earner planning for retirement.

Above-the-Line Deductions (Available Without Itemizing)

These deductions reduce your adjusted gross income (AGI) before choosing standard or itemized deductions, making them accessible to everyone.

1. Retirement Contributions (Traditional IRA, 401(k))
   • What It Is: Contributions to a Traditional IRA (up to $7,500 in 2025, or $8,500 if 50+) or 401(k) (up to $24,000, or $31,500 if 50+) are deductible, even if you take the standard deduction.
   • Example: Jane, 45, earning $45,000, contributes $7,500 to a Traditional IRA. This lowers her taxable income to $37,500, saving $1,650 (22% tax rate). If she maxes out her 401(k) at $24,000, her taxable income drops to $21,000, saving $5,280.
   • Tip: Check if your employer offers a 401(k) match (e.g., 4% of $45,000 = $1,800 free money). Use Bankrate’s 401(k) Calculator to optimize contributions.
   • Missed Opportunity: A 2024 Fidelity survey found 30% of workers don’t maximize retirement contributions, missing out on tax savings and employer matches.
2. Health Savings Account (HSA) Contributions
   • What It Is: Contributions to an HSA (up to $4,300 for individuals, $8,550 for families in 2025, plus $1,000 if 55+) are deductible if you have a high-deductible health plan (HDHP).
   • Example: Jane contributes $4,300 to an HSA, reducing her taxable income to $40,700, saving $946 in taxes. HSA funds grow tax-free and can be used for medical expenses or retirement after 65.
   • Tip: Verify HDHP eligibility with your insurance provider. Funds roll over annually, unlike FSAs, per IRS rules.
   • Missed Opportunity: A 2025 HealthEquity report shows 40% of HDHP enrollees don’t use HSAs, forgoing tax savings and investment growth.
3. Student Loan Interest
   • What It Is: Up to $2,500 in student loan interest is deductible if your modified AGI (MAGI) is below $80,000 (single) or $165,000 (married filing jointly), phasing out at $95,000/$195,000.
   • Example: Jane pays $3,000 in student loan interest. She deducts $2,500, saving $550 in taxes. If her MAGI is $50,000, she qualifies fully.
   • Tip: Check Form 1098-E from your lender for interest paid. Partial deductions apply during phase-out ranges.
   • Missed Opportunity: The IRS notes 25% of eligible borrowers miss this deduction due to lack of awareness.
4. Self-Employment Expenses
   • What It Is: Self-employed individuals (e.g., freelancers, gig workers) can deduct half of their self-employment tax (15.3% of net earnings) and business expenses like home office costs, internet, and supplies.
   • Example: Jane earns $10,000 freelancing. Her self-employment tax is $1,530; she deducts $765, saving $168. She also deducts $2,000 for a home office, saving $440.
   • Tip: Track expenses with apps like QuickBooks. The IRS requires a dedicated home office space for deductions.
   • Missed Opportunity: A 2024 TurboTax study found 35% of gig workers underreport business expenses, missing significant savings.

Itemized Deductions (If Exceeding Standard Deduction)

Itemizing requires expenses to exceed $14,600 (single) or $29,200 (married filing jointly). Common overlooked deductions include:

1. Medical Expenses
   • What It Is: Medical expenses exceeding 7.5% of AGI are deductible, including doctor visits, prescriptions, and long-term care premiums.
   • Example: Jane’s AGI is $45,000; 7.5% is $3,375. She spends $6,000 on dental work and prescriptions, deducting $2,625 ($6,000 – $3,375), saving $577.
   • Tip: Keep receipts and use HSA funds first to avoid double-dipping. Long-term care premiums are capped by age (e.g., $5,960 for ages 51-60 in 2025).
   • Missed Opportunity: A 2025 H&R Block report estimates 50% of taxpayers with high medical costs fail to itemize due to poor record-keeping.
2. Charitable Contributions
   • What It Is: Cash or property donations to qualified charities are deductible up to 60% of AGI for cash, 30% for appreciated assets like stocks.
   • Example: Jane donates $3,000 to a local food bank and $2,000 in stock (basis $1,000). She deducts $4,000 (cash + stock fair market value), saving $880.
   • Tip: Get receipts for donations over $250. Non-cash items need appraisals if over $5,000, per IRS Publication 526.
   • Missed Opportunity: A 2024 Giving USA report found 20% of donors miss deductions due to missing documentation.
3. State and Local Taxes (SALT)
   • What It Is: Up to $10,000 in state/local income, sales, or property taxes is deductible.
   • Example: Jane pays $6,000 in state income taxes and $2,000 in property taxes. She deducts $8,000, saving $1,760.
   • Tip: In high-tax states, track sales tax for big purchases (e.g., cars) using IRS tables if higher than income tax.
   • Missed Opportunity: A 2025 Tax Foundation study shows 15% of taxpayers in high-tax states opt for standard deductions, missing SALT benefits.
4. Home Mortgage Interest
   • What It Is: Interest on mortgages up to $750,000 (for homes bought after Dec. 15, 2017) is deductible, including points paid on purchase.
   • Example: Jane pays $5,000 in mortgage interest on her $200,000 home loan. She deducts $5,000, saving $1,100.
   • Tip: Check Form 1098 from your lender. Second homes qualify, but home equity loan interest is limited to acquisition debt.
   • Missed Opportunity: The IRS reports 10% of homeowners miss this deduction due to assuming it’s covered by the standard deduction.

Example: Jane’s 2025 Tax Strategy

Jane, 45, earns $45,000, has a $140,000 401(k), and fears market losses, as noted in a MarketWatch article. She takes these steps:

• Above-the-Line: Contributes $7,500 to a Traditional IRA ($1,650 savings) and $4,300 to an HSA ($946 savings).
• Itemized Deductions: Spends $6,000 on medical expenses (deducts $2,625, saves $577), donates $3,000 to charity ($660 savings), pays $6,000 in state taxes and $2,000 in property taxes ($1,760 savings), and $5,000 in mortgage interest ($1,100 savings). Total itemized: $18,625, exceeding the $14,600 standard deduction.
• Total Savings: $5,693 in tax savings, reducing her taxable income from $45,000 to $29,875 (including IRA/HSA deductions), with a refund of about $3,000 (assuming standard withholdings).

Challenges and Tips

• Record-Keeping: Missing receipts or poor tracking, like Jane’s initial oversight of medical expenses, cost 30% of taxpayers deductions, per a 2024 TurboTax study. Use apps like Expensify to organize.
• Tax Law Changes: The 2017 TCJA capped SALT at $10,000 and eliminated miscellaneous deductions (e.g., unreimbursed work expenses). Stay updated via IRS.gov.
• Professional Help: A CPA can uncover niche deductions, like educator expenses ($300 for teachers) or energy credits (up to $3,200 for solar panels in 2025). A 2025 H&R Block survey found 25% of filers miss deductions without professional help.

Public Sentiment and Resources

X users like @TaxPro advocate tracking HSA and charity deductions, while @MoneyWise warns against over-relying on standard deductions. Tools like TurboTax’s Deduction Finder or H&R Block’s Tax Calculator can identify eligible deductions. As a 2025 Fidelity report notes, 40% of Americans underutilize tax-advantaged accounts, missing out on thousands in savings.

The Bottom Line

For someone like Jane, maximizing deductions like IRA contributions, HSA, medical expenses, and charitable donations can save over $5,000 annually, bolstering retirement savings and easing financial stress. Review your expenses, consult a tax professional, and use IRS tools to ensure you’re not leaving money on the table. Start planning now to make tax season 2026 a win.