5 Little-Known Tax Deductions You Might Be Able to Claim

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

Service animals, gambling losses, and jury duty may not be at the top of your deductions list, but they might qualify. Read on to find out how. 

I have yet to meet a human being who enjoys doing their taxes. I don’t think they exist, and if I ever met someone who told me they enjoyed the process, I would assume they were an alien from another planet disguised as a human being who has no understanding of what taxes are.

But despite the near-universal contempt for taxes, there are a few things you can do to make the process slightly less terrible. Specifically, you can claim the appropriate tax deductions.

If you’re searching for a few tax deductions you may not have investigated before, here are five to look into.

1. Expenses for certified service animals

If your pet is a certified service animal, like a guide dog, you may be able to deduct some of the expenses for them. If you have a certified service animal to help you with a physical disability or a hearing or visual impairment, you may be able to deduct the cost to buy, train, and groom them, as well as veterinary services.

It’s worth mentioning that HR Block says that therapy animals are not considered certified service animals, according to the IRS.

2. Reinvested dividends

TurboTax says that this technically isn’t a tax deduction and is instead more like a subtraction, but the tax prep software company notes on its website that many taxpayers overlook it. The company says that if you have a mutual fund account and your stock dividends are automatically reinvested in new shares, then each reinvestment increases the “tax basis” in the mutual fund.

When you sell some of your shares in the mutual fund, the reinvested dividends reduce your taxable capital gains. So keep track of your dividend reinvestments and fill out the necessary sections on your tax forms.

3. Military reservist travel expenses

If you’re a member of the U.S. Armed Forces reserve, then you may be eligible for a tax deduction on out-of-pocket travel expenses for drills, training, or meetings.

If you traveled more than 100 miles from your home and stayed overnight for reserve training — and weren’t reimbursed for it — you may be able to claim the deduction on your taxes, including for lodging, meals, and transportation.

4. Gambling losses

Believe it or not, you can sometimes deduct your gambling losses on your tax return. The IRS says the amount of the losses you deduct can’t be more than your gambling income — and yes, you have to report your winnings as income.

The losses can be for gambling at a casino, but can also be for things like lottery tickets or raffles. Just make sure you keep very detailed records of money won and lost.​​ The IRS says you must keep “an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records” of your winnings and losses.

5. Jury duty pay paid to your employer

If you were lucky enough to score jury duty last year, this one might apply to you. Some companies will continue to pay your salary when you serve on a jury, but may ask you to hand over the money you received for jury duty.

According to TurboTax, you can avoid paying taxes on jury duty money as part of your taxable income if you claim the deduction and show that you passed the money along to your employer.

How to make tax season less painful

Whether you usually have to pay additional taxes or get a sizable return each year, there are a couple of things you can do to make the process a little easier:

Get organized: I usually throw any receipts and other records I may need for my taxes into a folder throughout the year. Then, a few weeks before I do my taxes, I sort through it and get organized. I find sorting the paperwork ahead of time, instead of the day I do my taxes, is less stressful and gives me time to hunt down any missing paperwork.Use tax prep software or hire a professional: This one might seem obvious, but you can save yourself a lot of time and hassle by either using tax prep software or hiring a professional accountant or tax preparer. I’m a self-employed writer and have gone both routes, and found each to be beneficial in its own way. Tax prep software is very comprehensive these days — some software options are even free — but a professional may be best to handle complex tax situations.

I usually give myself at least two days to complete my taxes. Spreading it out makes me feel less pressure to cram it all into one terrible Saturday afternoon. Instead, I’ll ruin two days. But it still seems less overwhelming that way.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More