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Becoming familiar with tax deductions and credits could potentially cut thousands of dollars off your tax bill and keep more money in your pocket.

Many Americans, however, are shortchanging themselves. Taxpayers who claimed the standard deduction on their tax returns received more than $747 billion in tax deductions, according to recent IRS data, but many of them missed out on tax deductions they deserved. 

For instance, one out of five people who qualify for the Earned Income Tax Credit don’t claim it on their tax returns, the IRS reports, which is one of the most refundable tax credits for families with low or moderate incomes. One possible reason why many people fail to take advantage of credits is because they think they are ineligible, experts say. 

“There are a lot of credits and deductions that Americans are missing out on,” says Lisa Greene-Lewis, a certified public accountant at TurboTax.

Here are nine deductions and credits that experts say are commonly overlooked: 

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Earned Income Tax Credit

The EITC is a refundable tax credit — not a deduction. This credit is designed to supplement wages for low-to-moderate income workers. It doesn’t however, apply to only lower-income taxpayers.

If you lost a job, took a pay cut or worked fewer hours during the year, experts say. 

“A lot of people think they make under the income threshold to file their taxes, so they don’t file their taxes and miss out on the Earned Income Tax Credit,” Greene-Lewis explains. “Others may have had a change in their income, so they may have made above the threshold before, but later were laid off or were unemployed for other reasons and don’t realize that they’re now eligible because their income has changed.”


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