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25 Popular Tax Deductions and Tax Breaks for 2025-2026
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A deduction cuts the income you're taxed on, which can mean a lower bill. A credit cuts your tax bill directly. Learn more about common tax breaks and write-offs — and how to claim them.
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Tax breaks are generally broken into two major categories: tax deductions and tax credits. As you examine programs that could potentially apply to you, it's a good idea to know the differences in how each benefit works.In short, a tax credit gives you a dollar-for-dollar reduction in the amount of tax you owe. A tax deduction — also sometimes called a tax write-off — provides a smaller benefit by allowing you to deduct a certain amount from your taxable income.
In short, a tax credit gives you a dollar-for-dollar reduction in the amount of tax you owe. A tax deduction — also sometimes called a tax write-off — provides a smaller benefit by allowing you to deduct a certain amount from your taxable income.Here are some of the most popular tax breaks and links to our other resources to help you learn more.
Here are some of the most popular tax breaks and links to our other resources to help you learn more.25 popular tax deductions and tax breaks
25 popular tax deductions and tax breaksThe tax breaks below apply to the 2025 calendar year (taxes due April 2026).
The tax breaks below apply to the 2025 calendar year (taxes due April 2026).1. Child tax credit
1. Child tax creditThe child tax credit (CTC) is a tax break for families with children below the age of 17. For 2025, the credit is worth up to $2,200 per child, with $1,700 being potentially refundable. To qualify, you have to meet certain income requirements, and you (or at least one spouse if filing jointly) and your child must have a valid Social Security number.
The child tax credit (CTC) is a tax break for families with children below the age of 17. For 2025, the credit is worth up to $2,200 per child, with $1,700 being potentially refundable. To qualify, you have to meet certain income requirements, and you (or at least one spouse if filing jointly) and your child must have a valid Social Security number.2. Child and dependent care credit
2. Child and dependent care creditThe child and dependent care credit (CDCC) is meant to cover a percentage of day care and similar costs for a child under 13, a spouse or parent unable to care for themselves, or another dependent so you can work. Generally, it's up to 35% of $3,000 of expenses for one dependent or $6,000 for two or more dependents.
The child and dependent care credit (CDCC) is meant to cover a percentage of day care and similar costs for a child under 13, a spouse or parent unable to care for themselves, or another dependent so you can work. Generally, it's up to 35% of $3,000 of expenses for one dependent or $6,000 for two or more dependents.3. American opportunity tax credit
3. American opportunity tax creditThe American opportunity tax credit, sometimes shortened to AOC, lets you claim all of the first $2,000 you spent on tuition, books, equipment and school fees — but not living expenses or transportation — plus 25% of the next $2,000, for a total of $2,500. It's also partially refundable, which means you can get up to $1,000 back if the credit zeros out your tax bill.
The American opportunity tax credit , sometimes shortened to AOC, lets you claim all of the first $2,000 you spent on tuition, books, equipment and school fees — but not living expenses or transportation — plus 25% of the next $2,000, for a total of $2,500. It's also partially refundable, which means you can get up to $1,000 back if the credit zeros out your tax bill.4. Lifetime learning credit
4. Lifetime learning creditThe lifetime learning credit lets you claim 20% of the first $10,000 you paid toward tuition and fees, for a maximum of $2,000. Like the American opportunity tax credit, the lifetime learning credit doesn’t count living expenses or transportation as eligible expenses. You can claim books or supplies needed for coursework.
The lifetime learning credit lets you claim 20% of the first $10,000 you paid toward tuition and fees, for a maximum of $2,000. Like the American opportunity tax credit, the lifetime learning credit doesn’t count living expenses or transportation as eligible expenses. You can claim books or supplies needed for coursework. AD Owe $10,000+ or More? This Tax Season Could Be Your Chance to Qualify Each year the IRS writes off millions in tax debt, yet few have applied. Learn moreon Anthem Tax Services' website
AD Let’s resolve your tax issues: Tax Relief & Resolution Services for IRS Tax Debt Certified Enrolled Agents, CPAs, and Tax Attorneys on your case. Learn moreon TaxRise's website
5. Student loan interest deduction
5. Student loan interest deductionThe student loan interest deduction lets borrowers write off up to $2,500 from their taxable income if they paid interest on their student loans. You don't need to itemize to take advantage of this deduction.
The student loan interest deduction lets borrowers write off up to $2,500 from their taxable income if they paid interest on their student loans. You don't need to itemize to take advantage of this deduction.6. Adoption credit
6. Adoption creditThe adoption credit is a tax break that helps taxpayers cover a certain amount of qualified adoption costs per child. The credit begins to incrementally decrease at certain income levels and completely phases out once your modified adjusted gross income (MAGI) exceeds the given threshold for that tax year. For 2025, the credit maxes out at $17,280, with up to $5,000 being refundable. The credit phases out at a MAGI of $259,190 or more.
The adoption credit is a tax break that helps taxpayers cover a certain amount of qualified adoption costs per child. The credit begins to incrementally decrease at certain income levels and completely phases out once your modified adjusted gross income (MAGI) exceeds the given threshold for that tax year. For 2025, the credit maxes out at $17,280, with up to $5,000 being refundable. The credit phases out at a MAGI of $259,190 or more.7. Earned income tax credit
7. Earned income tax creditThe earned income tax credit (EITC) is a refundable tax break for low-income taxpayers with and without children. For 2025, the credit ranges from $649 to $8,046, depending on how many kids you have, your marital status and how much you made.
The earned income tax credit (EITC) is a refundable tax break for low-income taxpayers with and without children. For 2025, the credit ranges from $649 to $8,046, depending on how many kids you have, your marital status and how much you made.8. Charitable donation deduction
8. Charitable donation deductionIf you itemize, you may be able to write off the value of qualifying charitable gifts — whether they’re in cash or property, such as clothes or a car — from your taxable income. Per the IRS, you can generally deduct up to 60% of your adjusted gross income.
If you itemize, you may be able to write off the value of qualifying charitable gifts — whether they’re in cash or property, such as clothes or a car — from your taxable income. Per the IRS, you can generally deduct up to 60% of your adjusted gross income.9. Medical expenses deduction
9. Medical expenses deductionIn general, you can write off qualified, unreimbursed medical expenses that are more than 7.5% of your adjusted gross income for the tax year.
In general, you can write off qualified, unreimbursed medical expenses that are more than 7.5% of your adjusted gross income for the tax year.10. Deduction for state and local taxes
10. Deduction for state and local taxesYou may deduct up to $40,000 ($20,000 if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes through a tax break known as the SALT deduction.
You may deduct up to $40,000 ($20,000 if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes through a tax break known as the SALT deduction .11. Mortgage interest deduction
11. Mortgage interest deductionThe mortgage interest tax deduction is touted as a way to make homeownership more affordable. It cuts the federal income tax that qualifying homeowners pay by reducing their taxable income by the amount of mortgage interest they pay.
The mortgage interest tax deduction is touted as a way to make homeownership more affordable. It cuts the federal income tax that qualifying homeowners pay by reducing their taxable income by the amount of mortgage interest they pay.12. Gambling loss deduction
12. Gambling loss deductionFor 2025, gambling losses and expenses are deductible to the extent of gambling winnings. So, spending $100 on lottery tickets isn’t deductible — unless you win and report at least $100, too. You can’t write off more than the amount you win.
For 2025, gambling losses and expenses are deductible to the extent of gambling winnings . So, spending $100 on lottery tickets isn’t deductible — unless you win and report at least $100, too. You can’t write off more than the amount you win.An important note for your future self: In 2026 (taxes filed in 2027), the total amount of losses you can deduct is limited to 90% of your winnings. This statute was included in the "One Big, Beautiful Bill Act" (OBBBA), which was enacted in July 2025
An important note for your future self: An important note for your future self: In 2026 (taxes filed in 2027), the total amount of losses you can deduct is limited to 90% of your winnings. This statute was included in the "One Big, Beautiful Bill Act" (OBBBA), which was enacted in July 2025 Congress.gov. H.R.1. .13. IRA contributions deduction
13. IRA contributions deductionYou may be able to deduct contributions to a traditional IRA, though how much you can deduct depends on whether you or your spouse is covered by a retirement plan at work and how much you make. You can make contributions that count toward the 2025 tax year until April 15, 2026 (Tax Day).
You may be able to deduct contributions to a traditional IRA , though how much you can deduct depends on whether you or your spouse is covered by a retirement plan at work and how much you make. You can make contributions that count toward the 2025 tax year until April 15, 2026 (Tax Day).14. 401(k) contributions deduction
14. 401(k) contributions deductionThe IRS doesn’t tax what you divert directly from your paycheck into a traditional 401(k). In 2025, you could have contributed up to $23,500 ($31,000 if 50 or older). People who are age 60, 61, 62 or 63 can add an additional $11,250. In 2026, that limit rises to $24,500 ($32,500 if 50 or older).
The IRS doesn’t tax what you divert directly from your paycheck into a traditional 401(k) . In 2025, you could have contributed up to $23,500 ($31,000 if 50 or older). People who are age 60, 61, 62 or 63 can add an additional $11,250. In 2026, that limit rises to $24,500 ($32,500 if 50 or older).These retirement accounts are usually sponsored by employers, although self-employed people can open their own 401(k)s.
These retirement accounts are usually sponsored by employers, although self-employed people can open their own 401(k)s .15. Saver’s credit
15. Saver’s creditThe saver's credit runs 10% to 50% of up to $2,000 ($4,000 if filing jointly) in contributions to an IRA, a 401(k), a 403(b) or certain other retirement plans. The percentage depends on your filing status and income.
The saver's credit runs 10% to 50% of up to $2,000 ($4,000 if filing jointly) in contributions to an IRA, a 401(k), a 403(b) or certain other retirement plans. The percentage depends on your filing status and income.16. Health savings account contributions deduction
16. Health savings account contributions deductionContributions to HSAs are tax-deductible, and the withdrawals are tax-free, too, as long as you use them for qualified medical expenses.
Contributions to HSAs are tax-deductible , and the withdrawals are tax-free, too, as long as you use them for qualified medical expenses.17. Self-employment expenses deduction
17. Self-employment expenses deductionThere are many valuable self-employment tax write-offs for freelancers, contractors and other self-employed people, including tax breaks for mileage, business insurance premiums, and business meals and travel.
There are many valuable self-employment tax write-offs for freelancers, contractors and other self-employed people, including tax breaks for mileage, business insurance premiums, and business meals and travel.18. Home office deduction
18. Home office deductionIf you use part of your home regularly and exclusively for business-related activity, the IRS lets you write off certain home office deductions for associated rent, utilities, real estate taxes, repairs, maintenance and other related expenses.
If you use part of your home regularly and exclusively for business-related activity, the IRS lets you write off certain home office deductions for associated rent, utilities, real estate taxes, repairs, maintenance and other related expenses.19. Educator expenses deduction
19. Educator expenses deductionIf you’re a schoolteacher or other eligible educator, you can deduct up to $300 spent on classroom supplies. Spouses who are both educators and file jointly get a deduction of $300 each, making them eligible to claim up to $600 on their return.
If you’re a schoolteacher or other eligible educator, you can deduct up to $300 spent on classroom supplies. Spouses who are both educators and file jointly get a deduction of $300 each, making them eligible to claim up to $600 on their return.20. Electric vehicle tax credit (limited)
20. Electric vehicle tax credit (limited)While the EV tax credit was eliminated by the OBBBA, taxpayers who purchased and took delivery of eligible cars by Sept. 30, 2025, may still be able to claim it on their tax returns in April.
While the EV tax credit was eliminated by the OBBBA, taxpayers who purchased and took delivery of eligible cars by Sept. 30, 2025, may still be able to claim it on their tax returns in April.The credit is worth up to $7,500 for new EVs or $4,000 for used EVs. Eligibility depends on a number of rules, including income, price of the vehicle and whether the car meets IRS manufacturing guidelines for qualified EVs.
The credit is worth up to $7,500 for new EVs or $4,000 for used EVs. Eligibility depends on a number of rules, including income, price of the vehicle and whether the car meets IRS manufacturing guidelines for qualified EVs.21. Home energy tax credits (limited)
21. Home energy tax credits (limited)The solar tax credit, also known as the "residential clean energy credit," can get you up to 30% of the installation cost of solar energy systems, including solar water heaters and solar panels, for qualified purchases made by Dec. 31, 2025. This credit was eliminated for 2026 as a result of the OBBBA, but taxpayers can still claim eligible expenses made before the cut-off date on their 2025 returns.
The solar tax credit, also known as the "residential clean energy credit," can get you up to 30% of the installation cost of solar energy systems, including solar water heaters and solar panels, for qualified purchases made by Dec. 31, 2025. This credit was eliminated for 2026 as a result of the OBBBA, but taxpayers can still claim eligible expenses made before the cut-off date on their 2025 returns.The energy-efficient home improvement tax credit allows homeowners who purchased qualifying home upgrades — such as energy-efficient windows, doors, and heat pumps — to recoup up to $3,200 on those investments when they file their tax returns. Like the solar tax credit, this benefit is no longer available for 2026, but eligible purchases made by the Dec. 31, 2025, deadline can be claimed on 2025 returns.
The energy-efficient home improvement tax credit allows homeowners who purchased qualifying home upgrades — such as energy-efficient windows, doors, and heat pumps — to recoup up to $3,200 on those investments when they file their tax returns. Like the solar tax credit, this benefit is no longer available for 2026, but eligible purchases made by the Dec. 31, 2025, deadline can be claimed on 2025 returns.22. Senior bonus deduction
22. Senior bonus deductionFilers who are 65 and older are already eligible for a slightly increased standard deduction on top of their regular standard deduction. But new this tax season, seniors who are 65-plus may qualify for an additional $6,000 "senior bonus deduction" if their income was $75,000 or less for single filers or $150,000 or less for joint filers. For those above the limit, the deduction phases out at a rate of six cents per dollar over the threshold.
Filers who are 65 and older are already eligible for a slightly increased standard deduction on top of their regular standard deduction. But new this tax season, seniors who are 65-plus may qualify for an additional additional $6,000 "senior bonus deduction" if their income was $75,000 or less for single filers or $150,000 or less for joint filers. For those above the limit, the deduction phases out at a rate of six cents per dollar over the threshold.23. Car loan interest deduction
23. Car loan interest deductionA new tax deduction available to filers as a result of OBBBA’s passage is the car loan interest deduction. This benefit allows individuals who purchased a new, U.S.-assembled vehicle in 2025 to deduct up to $10,000 in loan interest paid toward the purchase of the car.
A new tax deduction available to filers as a result of OBBBA’s passage is the car loan interest deduction. This benefit allows individuals who purchased a new, U.S.-assembled vehicle in 2025 to deduct up to $10,000 in loan interest paid toward the purchase of the car.The exact amount of interest you can deduct depends on your income: single filers who have a MAGI of $100,000 or less and joint filers with a MAGI of $200,000 or less are eligible for the maximum deduction, with those made above the limit being subject to a reduced deduction.
The exact amount of interest you can deduct depends on your income: single filers who have a MAGI of $100,000 or less and joint filers with a MAGI of $200,000 or less are eligible for the maximum deduction, with those made above the limit being subject to a reduced deduction.24. Tip income deduction
24. Tip income deductionAlso new this tax season, taxpayers may be able to deduct up to $25,000 worth of certain tips from their income without needing to itemize on their 2025 returns via the "no tax on tips" deduction. Not all tips qualify, and the deduction is reduced if your MAGI exceeded a certain limit ($150,000 for single filers and $300,000 for joint filers).
Also new this tax season, taxpayers may be able to deduct up to $25,000 worth of certain tips from their income without needing to itemize on their 2025 returns via the "no tax on tips" deduction . Not all tips qualify, and the deduction is reduced if your MAGI exceeded a certain limit ($150,000 for single filers and $300,000 for joint filers).25. Overtime pay deduction
25. Overtime pay deductionIn addition to deductions on tipped income, certain filers may also be able to deduct some overtime pay from their 2025 taxable income, even if they do not itemize. The deduction is limited to $12,500 for single filers and $25,000 for joint filers and follows the same income limits as the tipped income deduction.
In addition to deductions on tipped income, certain filers may also be able to deduct some overtime pay from their 2025 taxable income, even if they do not itemize. The deduction is limited to $12,500 for single filers and $25,000 for joint filers and follows the same income limits as the tipped income deduction.» MORE: What other tax credits can I qualify for?
» » » MORE: MORE: MORE: What other tax credits can I qualify for? AD Owe $10,000+ or More? This Tax Season Could Be Your Chance to Qualify Each year the IRS writes off millions in tax debt, yet few have applied. Learn moreon Anthem Tax Services' website
AD Let’s resolve your tax issues: Tax Relief & Resolution Services for IRS Tax Debt Certified Enrolled Agents, CPAs, and Tax Attorneys on your case. Learn moreon TaxRise's website
What are tax deductions?
What are tax deductions?A tax deduction lowers your taxable income, reducing how much of your earnings are subject to tax. For example, if your taxable income is $120,000 and you are eligible to take $20,000 in deductions, the IRS will only tax you on $100,000 of income. The lower your taxable income, the lower your tax bill.
A tax deduction lowers your taxable income, reducing how much of your earnings are subject to tax. For example, if your taxable income is $120,000 and you are eligible to take $20,000 in deductions, the IRS will only tax you on $100,000 of income. The lower your taxable income, the lower your tax bill.How do you claim tax deductions?
How do you claim tax deductions?Generally, there are two ways to claim tax deductions: Take the standard deduction or itemize deductions. You can’t do both.
Generally, there are two ways to claim tax deductions: Take the standard deduction or itemize deductions. You can’t do both.The standard deduction is a flat-dollar, no-questions-asked reduction in your adjusted gross income. The amount you qualify for depends on your filing status. For example, single filers who claim the standard deduction can subtract $15,750 from their 2025 taxable income. (You can learn more about standard deduction amounts here.)
The standard deduction The standard deduction is a flat-dollar, no-questions-asked reduction in your adjusted gross income. The amount you qualify for depends on your filing status. For example, single filers who claim the standard deduction can subtract $15,750 from their 2025 taxable income. (You can learn more about standard deduction amounts here .)Itemized deductions let you cut your taxable income by taking any of the hundreds of available tax deductions you qualify for. The more you can deduct, the less you’ll pay in taxes. There are dozens of itemized deductions available to taxpayers, but importantly, all of them have different rules. Examples of itemized deductions include unreimbursed medical expenses, charitable donations, and mortgage interest.
Itemized deductions Itemized deductions let you cut your taxable income by taking any of the hundreds of available tax deductions you qualify for. The more you can deduct, the less you’ll pay in taxes. There are dozens of itemized deductions available to taxpayers, but importantly, all of them have different rules. Examples of itemized deductions include unreimbursed medical expenses, charitable donations, and mortgage interest.Which one is better? The standard deduction has gone up significantly in recent years, so you might find that it's the better option for you now, even if you've itemized in the past. On the other hand, there are dozens of itemized deductions available to taxpayers, and all of them have different rules. Your tax software or tax preparer can run your return both ways to see which method produces a lower tax bill.
Which one is better? Which one is better? The standard deduction has gone up significantly in recent years, so you might find that it's the better option for you now, even if you've itemized in the past. On the other hand, there are dozens of itemized deductions available to taxpayers, and all of them have different rules. Your tax software or tax preparer can run your return both ways to see which method produces a lower tax bill.» See our top picks for the best tax software
» » » See our top picks for the best tax softwareWhat are above-the-line deductions?
What are above-the-line deductions?Contributions to a retirement account or health savings account and student loan interest payments are referred to as "above-the-line" deductions, but it may be easier to think of them as "adjustments" to your income.
Contributions to a retirement account or health savings account and student loan interest payments are referred to as "above-the-line" deductions, but it may be easier to think of them as "adjustments" to your income.These deductions are subtracted from your gross income to determine your adjusted gross income (AGI). Your AGI is important because it is the starting point for calculating your tax bill and also the basis on which you might qualify for many other deductions and credits.
These deductions are subtracted from your gross income to determine your adjusted gross income (AGI). Your AGI is important because it is the starting point for calculating your tax bill and also the basis on which you might qualify for many other deductions and credits.If you qualify for an above-the-line deduction, you can take it regardless of whether you itemize or take the standard deduction.
If you qualify for an above-the-line deduction, you can take it regardless of whether you itemize or take the standard deduction.» Ready to crunch the numbers? Estimate your refund or bill with our tax calculator
» Ready to crunch the numbers? » Ready to crunch the numbers? Estimate your refund or bill with our tax calculatorWhat is a tax write-off?
What is a tax write-off?The IRS doesn't use the term "tax write-offs" anywhere in the Internal Revenue Code, but the phrase has gained popularity as a synonym for "tax deduction" over the years. If you hear someone talking about a tax write-off, they're probably referring to certain deductions itemizers can take to lower their taxable income.
The IRS doesn't use the term "tax write-offs" anywhere in the Internal Revenue Code, but the phrase has gained popularity as a synonym for "tax deduction" over the years. If you hear someone talking about a tax write-off, they're probably referring to certain deductions itemizers can take to lower their taxable income.In contrast, a tax credit is a reduction in your actual tax bill.
In contrast, a tax credit is a reduction in your actual tax bill.» MORE: Tax credits vs. tax deductions
» » » MORE: MORE: MORE: Tax credits vs. tax deductions Frequently asked questionsA tax credit is a dollar-for-dollar reduction in your actual tax bill. A few credits are refundable, which means if you owe $250 in taxes but qualify for a $1,000 credit, you’ll get a check for the difference of $750. Most tax credits, however, aren’t refundable.
A tax credit is a dollar-for-dollar reduction in your actual tax bill. A few credits are refundable, which means if you owe $250 in taxes but qualify for a $1,000 credit, you’ll get a check for the difference of $750. Most tax credits, however, aren’t refundable.A tax credit can make a much bigger dent in your tax bill than a tax deduction.
A tax credit can make a much bigger dent in your tax bill than a tax deduction."Tax rebate" is another term that lacks a formal IRS definition. It generally refers to a phenomenon where a federal, state or local government decreases taxes retroactively (in other words, after the tax filing deadline for a particular year), and then refunds taxpayers the amount that they overpaid under the new rules.
"Tax rebate" is another term that lacks a formal IRS definition. It generally refers to a phenomenon where a federal, state or local government decreases taxes retroactively (in other words, after the tax filing deadline for a particular year), and then refunds taxpayers the amount that they overpaid under the new rules.Tax rebates are a bit like refundable tax credits in that they involve getting money back from the government. But a tax rebate is typically mailed to taxpayers automatically, with no action required. To claim a refundable tax credit, on the other hand, a taxpayer generally has to file a tax return and then receive the tax credit at refund time.
Tax rebates are a bit like refundable tax credits in that they involve getting money back from the government. But a tax rebate is typically mailed to taxpayers automatically, with no action required. To claim a refundable tax credit, on the other hand, a taxpayer generally has to file a tax return and then receive the tax credit at refund time.That's another difference between tax rebates and tax credits — timing. Taxpayers generally only receive refundable tax credits during tax refund season, while tax rebates can happen at any time of year.
That's another difference between tax rebates and tax credits — timing. Taxpayers generally only receive refundable tax credits during tax refund season, while tax rebates can happen at any time of year.There have only been a handful of federal tax rebates in recent history, but they're a relatively common occurrence among state and local governments.
There have only been a handful of federal tax rebates in recent history, but they're a relatively common occurrence among state and local governments.A tax credit is a dollar-for-dollar reduction in your actual tax bill. A few credits are refundable, which means if you owe $250 in taxes but qualify for a $1,000 credit, you’ll get a check for the difference of $750. Most tax credits, however, aren’t refundable.
A tax credit can make a much bigger dent in your tax bill than a tax deduction.
"Tax rebate" is another term that lacks a formal IRS definition. It generally refers to a phenomenon where a federal, state or local government decreases taxes retroactively (in other words, after the tax filing deadline for a particular year), and then refunds taxpayers the amount that they overpaid under the new rules.
Tax rebates are a bit like refundable tax credits in that they involve getting money back from the government. But a tax rebate is typically mailed to taxpayers automatically, with no action required. To claim a refundable tax credit, on the other hand, a taxpayer generally has to file a tax return and then receive the tax credit at refund time.
That's another difference between tax rebates and tax credits — timing. Taxpayers generally only receive refundable tax credits during tax refund season, while tax rebates can happen at any time of year.
There have only been a handful of federal tax rebates in recent history, but they're a relatively common occurrence among state and local governments.
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