🔍 Work-Related Deductions You Might Be Missing

☕ Good morning!

Ever feel like you’re doing everything right with your taxes—maxing out retirement accounts, making charitable donations, writing off business expenses—only to feel that there might be more ways to save? 

You’re not alone. 

Many high-earners think they’ve covered all the bases, but the tax code is massive, and plenty of deductions quietly go unused. 

These aren’t loopholes. They’re legitimate strategies designed to help you keep more of your hard-earned income.

 Let’s explore some opportunities that often fly under the radar.  

💼 Are You Missing Out on These Work-Related Deductions? 

If you think there’s nothing you can deduct as an employee, think again. While tax laws have changed, a few key breaks are still available:  

💡 Making Your Education Pay Off  

Imagine Lisa, a CFO, who spends thousands on an advanced corporate risk management course to enhance her current role. 

That’s deductible. 

But if she decides to switch careers and become a software engineer? Unfortunately, that expense might not qualify. 

If you’re investing in professional development that directly improves your skills in your current job, you could be missing out on valuable deductions. 

Even executive MBAs and certifications may qualify if they enhance your current role, often allowing you to deduct thousands in tuition and fees.

💡 The Home Office Deduction Isn’t Just for Freelancers

Think working from home as a salaried executive means no tax breaks? Not always. 

While federal rules make this tricky, several states still allow deductions for unreimbursed work expenses—including a home office. 

There’s a catch: the space must be used exclusively for work (your kitchen table doesn’t count). 

But if your employer doesn’t provide a dedicated space, you might be eligible for state tax relief on home office expenses, including a portion of your rent, utilities, and internet.

💡 Expenses Your Employer Won’t Cover Could Still Save You Money 

High-speed internet, that second phone line, even the ergonomic chair that keeps you from hunching over your laptop—if you’re paying for job-related necessities out of your own pocket and not getting reimbursed, check your state tax laws. 

While federal tax reform eliminated many of these deductions, some states still let you claim them.

💡 A Smart Way to Handle Investment Advisory Fees  

Since 2018, investment advisory fees aren’t deductible from taxable income anymore. But here’s a little-known workaround: paying them directly from your IRA. 

It doesn’t trigger extra taxes and lowers the out-of-pocket cost; it’s one of those easy financial tweaks that can add up over time. 

🏦 Making Your Investments Work Smarter, Not Just Harder

Tax inefficiency is one of the biggest ways investors lose money unnecessarily. 

Take Mike—he’s built a sizeable taxable brokerage account but didn’t realize his dividend-paying stocks were quietly triggering extra taxes. A few adjustments to his strategy could reduce his tax bill.   

🏙️ Municipal bonds generate tax-free interest, perfect for high earners looking to minimize taxable investment income. 

♥️ Health Savings Accounts (HSAs) offer a rare triple tax advantage: tax-deductible contributions, tax-free investment growth, and tax-free withdrawals for medical expenses.  

🌽Tax loss harvesting helps offset capital gains by strategically selling losing investments—an easy way to reduce taxable income.  

🕊️ Charitable Giving: More Tax Savings While Doing Good  

If you’re already giving, why not do it in the most tax-efficient way? 

Many executives cut a check to charity without realizing smarter giving strategies exist:  

1. Donor-Advised Funds (DAFs): Instead of donating sporadically, you can contribute a larger sum in one year (maximizing tax deductions) and distribute the funds over time.  

2. Qualified Charitable Distributions (QCDs): If you’re 70½ or older, donating directly from your IRA helps you meet required minimum distributions without adding taxable income.  

Even small tweaks to how you give can make a big difference in how much you owe—or save.  

🏠 Hidden Education & Childcare Tax Breaks  

Many high earners assume tax benefits disappear as income rises. Not always. If you’re paying for childcare or saving for education, you might be missing out on valuable savings:  

🚸 Dependent Care FSAs allow up to $5,000 in tax-free childcare expenses annually, giving working parents a serious break.  

🏫 529 Plans don’t offer federal deductions but can come with state tax savings—meaning your college savings could also help reduce your tax bill.  

🚑 Overlooked Medical Write-Offs  

No one is really seeking out medical expenses for the tax advantages, but they’re there. 

Medical expenses can be a surprisingly effective way to lower taxable income, especially when they exceed 7.5% of your adjusted gross income (AGI). 

Many executives pay for things like fertility treatments, home health care for aging parents, and travel costs related to medical procedures out-of-pocket without realizing they might be able to claim them. 

🏡 Bonus: The Augusta Rule (Section 280A(g)) 

If you own a home and run a business, you could be sitting on a completely tax-free deduction thanks to a little-known IRS provision.

According to the Augusta Rule, you can rent out your home to your business for up to 14 days per year, and the income is completely tax-free.

The business gets to deduct the rental expense, reducing taxable income. Of course, proper documentation of fair market rental rates is required, but this is a 100% legal way to shift income tax-free.

This is one of the most overlooked strategies that business owners can use to pull tax-free money out of their business. 

🙈 Making Sense of Hidden Tax Deductions

The IRS isn’t in the business of sending you reminders about the deductions you’re missing—so it’s up to you (and your financial planner) to take control. 

Tax planning isn’t just about preparing a return but about being intentional all year. 

Your next steps:

✅ Review last year’s return for missed deductions.  

✅ Track any work-related expenses you’re covering personally.  

✅ Make sure your retirement, investments, and charitable giving are set up for maximum tax efficiency.  

A few small changes today could mean six figures in tax savings over time. You work hard for your money—make sure you’re keeping what’s rightfully yours.

Stay savvy, stay proactive, and keep your financial future bright.

Until next week!

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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