8 Common Above-the-Line Deductions Anyone Can Claim

2. Early withdrawal penalties

Did you have to crack open a bank certificate of deposit last year? Did you get dinged with a penalty? You can deduct the danged ding above the line.

3. Health savings accounts (HSAs)

If you have a high-deductible medical plan, you can cover some of your out-of-pocket expenses with an HSA. If you paid for your HSA with after-tax money, you can deduct up to $7,300 for families and $3,650 for individuals this tax year. If you’re 55 or over at any time in the year, you can contribute and deduct another $1,000. You’ll need to file Form 8889 — Health Savings Accounts (HSAs) — with your return. And if you paid for your HSA with pretax money, you don’t get the deduction.

4. Individual retirement accounts (IRAs)

If you contributed to a traditional IRA, and neither you nor your spouse had a retirement plan available to you during the year, the contributions are tax deductible. You can each contribute $6,000 — $7,000 if you’re 50 or older. If you did have a retirement plan available at work, you still may be able to deduct some or all of your IRA contribution, depending on your income.

5. Military moving expenses

If you have a permanent change of station — either from your home to your military base, from one base to another, or a move from your last post back home — you can deduct reasonable moving expenses. Those expenses include the cost of moving household goods, personal effects, storage and traveling expenses (including lodging) to your new home. That burger you bought at a rest area on the Ohio Turnpike? Nope. Meals aren’t included.

You must take the deduction within one year of ending your active duty.

6. Self-employment costs

One of the shocks for many people who become self-employed is the payroll tax for Social Security and Medicare. It’s a combined 15.3 percent of your gross income on top of ordinary income taxes. Fortunately, you can take half of that in an above-the-line deduction. (You’ll have to file Form 1040 Schedule SE — Self-Employment Tax — to claim it, but if you have self-employment income, you’ll have to file it anyway.)

But those aren’t the only self-employment costs eligible for an above-the-line deduction. If you have a self-directed retirement plan, such as a SIMPLE IRA or a Simplified Employee Pension (SEP), that’s an above-the-line deduction, too. And if you’re paying for your own health insurance (including Medicare), you can deduct those premiums, as well.

7. Student loan interest payments

Although most student loan payments were suspended in 2022 due to the COVID-19 pandemic, no one was forbidden to make payments. And if you did make payments, the interest portion is an above-the-line deduction, which may soften the impact of making those payments. There’s a limit to this deduction: $2,500.

8. Teacher expenses

If you’re a teacher and have to pay some expenses out of your own pocket — think books, organizational containers, toys or musical instruments — you can deduct up to $300. If you’re married to another teacher, you can jointly deduct $600. 

Other less common deductions. Are you an Olympic (or Paralympic) champion? You can deduct your winnings. Did you give your pay from your jury duty to your employer because it was paying you? You can deduct that as well. Did you have supplemental unemployment benefit repayments? You can deduct those. All of the less-common deductions are outlined in IRS Publication 529 — Miscellaneous Deductions.