Every year, millions of Americans leave money on the table at tax time. Not because they're dishonest — but because the tax code is genuinely complicated, and the most valuable deductions are also the easiest to overlook. A missed deduction isn't just a small inconvenience; it's money you've already earned being handed back to the IRS unnecessarily.

At VeriAccount, we've helped countless individuals and families in the DC and Maryland area untangle their taxes and claim every dollar they're owed. Here are the most common tax deduction mistakes we see — and exactly how to avoid them.

Mistake #1: Not Tracking Business-Related Expenses Year-Round

One of the biggest mistakes self-employed individuals and small business owners make is waiting until tax season to reconstruct their expenses. By then, receipts are lost, mileage logs are incomplete, and legitimate deductions get left behind.

What you can deduct:

• Home office expenses (a dedicated workspace used exclusively for business)
• Business mileage at the IRS standard rate
• Professional development, courses, and certifications
• Business-related software subscriptions and tools
• A portion of your phone and internet bills

How to avoid it: Use a simple spreadsheet or a free app to log expenses and mileage in real time throughout the year. Even a few minutes each week can save you hundreds — or thousands — at filing time.

Mistake #2: Overlooking Above-the-Line Deductions

Most people know about itemized deductions, but fewer take full advantage of "above-the-line" deductions — adjustments to income you can claim even if you take the standard deduction. These are some of the most powerful deductions available, and they're frequently missed.

Common above-the-line deductions include:

• Contributions to a traditional IRA (up to $7,000 in 2026; $8,000 if you're 50 or older)
• Student loan interest paid during the year
• Health Savings Account (HSA) contributions
• Self-employed health insurance premiums
• Alimony paid under pre-2019 divorce agreements

How to avoid it: Before you file, review IRS Schedule 1 line by line. Better yet, work with a tax professional who will ask the right questions to surface every deduction that applies to your situation.

Mistake #3: Forgetting Charitable Contributions

Charitable giving is one of the most underreported deductions. People remember the big cash donations but forget about the smaller ones — and they almost never track non-cash contributions.

What counts:

• Cash donations to qualifying 501(c)(3) organizations
• Donated clothing, furniture, and household goods (at fair market value)
• Mileage driven for volunteer work (14 cents per mile in 2026)
• Out-of-pocket expenses incurred while volunteering

How to avoid it: Keep a running log of every donation throughout the year. For non-cash donations, photograph the items and use a valuation guide like the Salvation Army's donation value guide to estimate fair market value. Always get a written acknowledgment for any single donation of $250 or more.

Mistake #4: Missing Education and Childcare Credits

Tax credits — which reduce your tax bill dollar for dollar — are even more valuable than deductions, and two of the most commonly missed involve education and childcare.

The Child and Dependent Care Credit covers a percentage of what you pay for childcare so you can work or look for work. This includes daycare, after-school programs, and even summer day camps. Many families don't realize this credit extends to care for a dependent adult as well.

The Lifetime Learning Credit allows you to claim up to $2,000 per year for qualified tuition and education expenses — not just for traditional college students, but for anyone taking courses to improve job skills.

How to avoid it: Gather Form 2441 for childcare expenses and Form 1098-T from any educational institution. If you're unsure whether your expenses qualify, a tax professional can confirm eligibility quickly.

Mistake #5: Failing to Deduct Medical Expenses

Medical expenses are deductible when they exceed 7.5% of your adjusted gross income (AGI) — but many people assume their expenses don't reach that threshold and never bother to add them up. In years with significant medical events, this deduction can be substantial.

Qualifying expenses include:

• Health insurance premiums (if not paid pre-tax through an employer)
• Prescription medications
• Doctor, dentist, and hospital visits
• Mental health treatment and therapy
• Medical equipment and supplies
• Transportation to and from medical appointments

How to avoid it: Total your medical expenses before assuming you don't qualify. If you're close to the threshold, consider timing elective procedures or prepaying for prescriptions in December to push you over the limit in a single tax year.

Mistake #6: Not Claiming the Earned Income Tax Credit (EITC)

The Earned Income Tax Credit is one of the most valuable credits available to low- and moderate-income workers — and the IRS estimates that roughly 20% of eligible taxpayers fail to claim it every year. The credit can be worth up to $7,830 depending on your income and number of qualifying children.

You may qualify if:

• You earned income from work (wages, salary, or self-employment)
• Your income falls within IRS limits for your filing status and family size
• You meet residency and citizenship requirements

How to avoid it: Use the IRS EITC Assistant tool at irs.gov to check your eligibility. If you've had a change in income, marital status, or family size, always re-check — your eligibility can shift from year to year.

Mistake #7: Ignoring State-Specific Deductions

Federal taxes get most of the attention, but Maryland and DC both offer their own deductions and credits that residents frequently overlook. These can include deductions for 529 college savings contributions, property tax credits for homeowners, and credits for energy-efficient home improvements.

How to avoid it: Don't assume your federal return tells the whole story. A tax professional familiar with DC and Maryland tax law can identify state-level opportunities that generic tax software often misses.

The Real Cost of DIY Tax Mistakes

Tax software has made filing easier than ever — but "easier" doesn't always mean "more accurate." These tools are only as good as the information you put in. If you don't know to look for a deduction, the software won't find it for you.

A professional tax preparer doesn't just enter your numbers. They ask questions, spot patterns, and apply knowledge of current tax law to your specific situation. For most people, the cost of professional tax preparation is far outweighed by the deductions and credits recovered.

Life Changes and Tax Changes Go Hand in Hand

Marriage, divorce, a new child, a job loss, an inheritance — every major life transition reshapes your tax situation. Filing status, withholding, available credits, and deductible expenses can all shift dramatically in a single year. Missing these changes is one of the most common — and costly — tax mistakes we see. For a full breakdown of the financial pitfalls to avoid when life changes fast, read Avoiding Common Financial Mistakes During Life Transitions.

Build the Financial Foundation That Makes Tax Planning Easier

Maximizing your deductions is one piece of a larger financial picture. When you have a solid emergency fund in place, you're less likely to make reactive financial decisions — like cashing out retirement accounts early or taking on high-interest debt — that create costly tax consequences. If you haven't built your safety net yet, our guide How to Build an Emergency Fund: A Practical Roadmap walks you through exactly how to get started.

Take Control of Your Tax Situation

You work hard for your money. You shouldn't have to give more of it to the IRS than the law requires.

At VeriAccount, our tax preparation services are designed to make sure you claim every deduction and credit you're entitled to — accurately, efficiently, and with full compliance. Whether you're filing as an individual, a family, or a small business owner in the DC or Maryland area, we're here to help.

If you are self-employed or running a freelance business, the stakes are even higher — and the opportunities are greater. From the home office deduction to self-employment tax strategies and quarterly estimated payments, the self-employed tax picture is its own discipline. Our guide Tax Planning for Self-Employed Professionals: Strategies to Keep More of What You Earn covers the full playbook.

Ready to stop leaving money on the table? Contact VeriAccount today to schedule a consultation. We'll review your situation, answer your questions, and make sure your next tax return works as hard as you do.