These Are The Most Common Tax Deductions

As tax season approaches, it's important to understand the common deductions available for the 2025 tax year. These deductions can significantly reduce your taxable income, potentially lowering your tax bill or increasing your refund.

The Internal Revenue Service (IRS) has announced inflation adjustments for 2025, impacting several tax provisions. One key deduction is the Standard Deduction, which increased for 2025. Single filers can claim $14,600, while married couples filing jointly can deduct $29,200. Heads of household can claim a deduction of $21,900.

In addition to the Standard Deduction, taxpayers can choose to itemize deductions if it results in a larger tax benefit. Common itemized deductions include mortgage interest, state and local taxes, and charitable contributions. However, you must choose between the Standard Deduction and itemizing; you cannot do both.

Above-the-line deductions are another option, available regardless of whether you itemize. These deductions, such as contributions to retirement accounts and student loan interest, reduce your adjusted gross income (AGI), potentially qualifying you for additional tax benefits.

For those with health savings accounts (HSAs), the maximum deduction for contributions has increased. In 2025, individuals with self-only coverage can deduct up to $4,150, while those with family coverage can deduct up to $8,300.

It's important to note that while deductions reduce taxable income, tax credits directly reduce the amount of tax owed. Tax credits can be refundable or nonrefundable, with refundable credits potentially resulting in a refund if they exceed the tax owed.

As tax laws and provisions can change, it's advisable to consult a tax professional to ensure you're maximizing your deductions and credits. The U.S. Bank suggests staying informed about potential changes, especially with the Tax Cuts and Jobs Act set to expire at the end of 2025.