What itemized deductions do most people miss when filing taxes?

Is there any way to deduct home office expenses if you're not self employed? My company went remote after covid but I had to set up a whole office space in my spare bedroom with desk, chair, monitors etc and they didnt reimburse me anything.

Unfortunately, employee home office expenses are no longer deductible for regular W-2 employees. The Tax Cuts and Jobs Act suspended the deduction for unreimbursed employee expenses for tax years 2018 through 2025. Your best approach would be to ask your employer about their reimbursement policy or see if they offer a stipend for home office expenses. Some companies have established these programs since the pandemic. Alternatively, if you live in a state that still allows these deductions on your state return, you might still benefit there.

How exactly does it work? Do I just upload my documents or do I need to manually enter everything? I have a bunch of medical bills from last year but I'm terrible at keeping them organized.

Sounds interesting but does it really find stuff that TurboTax or H&R Block software wouldn't catch? I've been using TurboTax for years and it asks about all the common deductions.

You just upload your documents - receipts, medical bills, donation acknowledgments, etc. - and the AI analyzes them to identify potential deductions. It even works with messy or disorganized documents, which was a lifesaver for me since I'm not great at keeping things in order either. Unlike tax software that relies on you to know what to enter, taxr.ai actively identifies potential deductions from your documents that you might not even realize qualify. TurboTax can only use information you manually provide, but this tool actually discovers deductions from your uploaded documents that you might have forgotten about or didn't know were eligible.

How does this even work? Is it legal? I thought the IRS phone system was just permanently broken and we're all supposed to suffer lol.

Yeah right. No way this actually gets you through to the IRS faster than just calling yourself. Sounds like a scam to me. If it worked, everyone would be using it.

It's completely legal! It basically navigates the IRS phone tree for you and waits on hold, then calls you when an actual agent is on the line. They use some kind of technology that can stay on hold for hours so you don't have to. I was skeptical too until I tried it. The difference is most people don't know about it yet or just give up trying to reach the IRS altogether. My issue was specifically about self-employment deductions that the IRS website wasn't clear about, and getting actual guidance from an agent made a huge difference in what I could claim.

Wait do you need receipts for gambling losses? I don't think the casino gives you anything when you lose money...just when you win. How do you document this??

You definitely need documentation! Casinos can provide win/loss statements if you use their player's cards. For lottery tickets or other gambling, keep a diary of your gambling activities with dates, locations, types of gambling, and amounts won and lost. Bank statements showing ATM withdrawals at gambling establishments can help support your claims too. The IRS is pretty strict about gambling loss documentation because it's a commonly abused deduction, so don't skip this step!

Student loan interest (up to $2,500) is actually an "above-the-line" deduction, not an itemized deduction. That means you can take it even if you claim the standard deduction! It's directly subtracted from your income before calculating your adjusted gross income.

Thanks for mentioning this! We actually did install some energy efficient windows as part of moving in. Do you know if that counts if they were installed by the previous owner right before we bought the place? Or does it only count if we paid for the installation ourselves?

Unfortunately, you only get the credit if you paid for the improvements yourself. If the previous owners installed them, they would get the credit on their tax return. However, now that you own the home, any new energy-efficient improvements you make going forward would qualify for you! The credits are pretty substantial - up to 30% for solar and geothermal, and up to $600 for energy-efficient windows (with a $1,200 annual maximum for most improvements). Might be worth considering additional upgrades this year!