Why this matters

Missing eligible itemized deductions reduces your tax savings and can make the difference between taking the standard deduction and itemizing. After the Tax Cuts and Jobs Act (TCJA) nearly doubled the standard deduction, fewer taxpayers itemize — but for homeowners, those with large medical costs, or donors who plan well, itemizing still pays. In my 15 years helping clients, small recordkeeping failures (lost receipts, untracked donations, omitted medical bills) are the top reason people leave money on the table.

The most commonly forgotten itemized deductions

Below are the deductions I see clients miss most often, with practical tracking tips and IRS references.

  1. Medical and dental expenses (only the portion over 7.5% of AGI)
  • What it is: Out-of-pocket payments for diagnosis, treatment, prescriptions, dental, vision, and some long‑term care costs. The deductible amount is the total qualifying expenses minus 7.5% of your adjusted gross income (AGI) for the tax year. See IRS Publication 502 for details (https://www.irs.gov/pub/irs-pdf/p502.pdf).
  • Why people forget: Expenses are scattered across providers and years; they may assume insurance or HSA payments disqualify the expense.
  • Track: Keep year‑end statements, pharmacy receipts, mileage logs for medical transportation, and records of insurance reimbursements.
  1. State and local taxes (SALT) beyond payroll withholding or estimated tax payments
  • What it is: Deduction for state and local income taxes, sales taxes, and property taxes — combined cap of $10,000 for most filers (consult IRS guidance and your state rules). After TCJA, many filers hit the cap; still, taxpayers often forget property tax assessments, personal property taxes, or allowable state taxes paid in a prior year.
  • Why people forget: Failure to include escrow payments, tax refunds applied to next year, or separate local assessments.
  • Track: Save property tax bills, state tax payment confirmations, and year-end property tax escrow statements. See FinHelp’s primer on the State and Local Tax (SALT) Deduction and background on TCJA changes in How the Tax Cuts and Jobs Act Affects State and Local Tax Deductions. For planning alternatives, see our piece on SALT cap workarounds.
  1. Charitable contributions (cash and non‑cash)
  • What it is: Gifts to qualified organizations. Cash, payroll deductions, appreciated securities, and noncash items (clothing, household goods) can be deductible when properly valued and documented. See IRS Publication 526 (https://www.irs.gov/pub/irs-pdf/p526.pdf).
  • Why people forget: Small cash gifts, online crowdfunding donations, or garage-sale donations that weren’t documented. Noncash donations often lack an accurate valuation or Form 8283 for higher amounts.
  • Track: Collect receipts, bank or card records, acknowledgment letters for gifts over $250, and a dated before/after photo for noncash donations. For strategies, read our article on Bunching Charitable Contributions.
  1. Mortgage interest and mortgage insurance premiums
  • What it is: Interest on acquisition debt for your primary (and sometimes second) home is generally deductible, subject to limits (see IRS Publication 936 for mortgage interest rules and limits). Mortgage insurance premiums may be deductible in certain years depending on law and income phaseouts.
  • Why people forget: Borrowers often overlook points paid in earlier years, mortgage insurance billed through escrow, or mistaken statements about deductible limits.
  • Track: Year‑end Form 1098 from your lender, closing statements for points paid, and correspondence showing PMI payments.
  1. Casualty and theft losses in a federally declared disaster
  • What it is: Losses to property from casualty or theft are deductible only in limited circumstances — generally when the loss is attributable to a federally declared disaster (see IRS guidance). There are additional thresholds (generally $100 per loss and 10% of AGI tests).
  • Why people forget: Not realizing a loss qualifies, missing timely FEMA or disaster declarations, or failing to document pre‑loss value and repair estimates.
  • Track: Police/fire reports, repair estimates, receipts for emergency work, photos, insurance claims, and FEMA declaration dates.
  1. Unreimbursed employee expenses (limited)
  • What it is: After TCJA, miscellaneous unreimbursed employee business expenses subject to the 2% AGI floor were suspended for most employees through 2025. However, certain categories—like some reservists, performing artists, or fee-basis state or local government officials—still have deductible unreimbursed expenses. Check current IRS guidance and state tax rules.
  • Why people forget: Confusion over suspended deductions and which exceptions remain.
  • Track: Employer statements, mileage logs, receipts for unreimbursed travel or required tools, and documentation of eligibility under an exception.
  1. Investment interest and deductible tax prep fees (limited)
  • What it is: Interest paid on loans used to buy taxable investments is deductible up to net investment income. Miscellaneous tax prep fees are largely suspended at the federal level, though state rules may differ.
  • Why people forget: Misclassifying investment expenses as non-deductible personal expenses.
  • Track: Brokerage statements showing margin interest, loan documents, and invoices from tax preparers.

Practical recordkeeping checklist (what to save all year)

  • Bank and credit card records for payments to providers and charities
  • Form 1098 (mortgage interest and points) and property tax bills
  • Receipts and itemized statements from medical and dental providers
  • Acknowledgment letters from charities (IRS requires written acknowledgment for gifts $250+)
  • Photos, police/fire reports, repair estimates for casualty/theft losses
  • Mileage logs for medical and charitable travel (date, purpose, miles)

When you should consider itemizing

  • Your itemized total likely exceeds the standard deduction for your filing status. For recent guidance and a decision framework, see FinHelp’s guide on How to Decide Whether to Itemize or Use the Standard Deduction.
  • You had a major life event during the year: large medical bills, big charitable gifts, home purchase, or casualty loss.

Tax planning strategies I use with clients

  • Bunching donations: Combine two years of charitable gifts into one tax year (using donor-advised funds if helpful) so itemized deductions exceed the standard deduction in that year. (See our article on bunching linked above.)
  • Timing deductible payments: Prepay property taxes or make a planned charitable gift in December to control which tax year the deduction falls in.
  • Keep a single digital folder: I advise clients to keep a running folder (cloud or app) for deductible receipts and upload items monthly. That makes year-end preparation fast and defensible if audited.

Common mistakes and how to avoid them

  • Relying on memory: Set a monthly reminder to scan and upload receipts. Small donations and medical co-pays add up.
  • Missing documentation: For cash gifts under $250 the IRS still expects reliable records; for gifts $250+ you need a contemporaneous written acknowledgment from the charity.
  • Misapplying limits: Don’t assume every expense is fully deductible—check AGI thresholds, caps (like SALT), and special suspensions created by TCJA. Consult IRS publications (Pub. 502, 526, 936) for specific rules.

Audit tips and substantiation

The IRS focuses on documentation. If you claim large medical, charitable, or casualty deductions, keep supporting documents for at least three years (the default IRS statute of limitations), and longer if you file amended returns or carrybacks. See general guidance at IRS.gov’s itemized deductions page (https://www.irs.gov/taxtopics/tc502) and consult Publication 17 for recordkeeping basics.

When to consult a professional

If you have a complex situation—significant noncash donations, casualty claims, or questions about SALT planning—talk to a CPA or enrolled agent. In my practice I’ve found early planning (Q4 of the prior year) gives the most options for bunching or timing deductions.

Disclaimer

This article is educational and does not replace personalized tax advice. Rules change; verify specifics against current IRS publications and consult a qualified tax professional about your situation.

Authoritative sources