A Quick Guide to Tax Deductions
A complex tax code makes it easy to leave money on the table around tax time. But there are several commonly overlooked tax deductions that can help Texans trim their tax bills, including home office expenses, energy-efficient home upgrades, and business-related insurance premiums.
Here’s a closer look at some commonly overlooked tax deductions for Texas homeowners, small-business owners, and freelancers.
Homeowners
Homeowners in Texas may be eligible for several different tax deductions. Here are some of the most overlooked.
Certain Medical-Based Home Improvements
Home renovations are eligible for tax deduction if their primary purpose is to help you, your spouse, or a dependent with a medical condition. These types of improvements range from lowering kitchen cabinets to widening doorways for wheelchair accessibility to adding a stair lift.
Keep in mind: If the improvements raise the value of your home, you’ll have to subtract the value of that increase from the deduction. But, typically, most minor improvements don’t increase the value of your home, allowing the cost to be treated as a deductible medical expense.
Energy-Efficient Home Improvements
Homeowners who made energy-efficient improvements to their home after Jan. 1, 2023, may qualify for a tax credit up to $3,200. These improvements range from installing exterior doors that meet Energy Star standards to purchasing a biomass stove with a thermal efficiency rating of at least 75%. (Biomass stoves burn items such as wood, wood waste, plants, and grasses to heat a home or water.)
Selling Costs
Looking to sell your home this year? You can deduct certain expenses, such as real estate agent commissions, escrow and inspection fees, and administrative costs. If you make a profit from the sale, you can exclude up to $250,000 of capital gains from your income. If you’re married and filing jointly, that number increases to $500,000.
Small-Business Owners & Freelancers
Often, the potential deductions that apply to small-business owners and freelancers overlap. Freelancers may be running a one-person show, while a small-business owner corrals a small but mighty team. Their commonality? Self-employment. (And remembering quarterly tax payments.) These potential tax deductions may be applicable to small-business owners and freelancers.
Startup Costs
Some upfront costs associated with starting a business can be written off. This includes costs, totaling less than $50,000, associated with advertising, training employees, and stocking the office with supplies. Keep in mind: You can’t claim these deductions if the business doesn’t actually launch.
Interest
Credit card interest on business purchases (made on a business credit card) and interest on a business loan are tax deductible. This does not apply to interest on personal purchases.
Professional Memberships
The IRS allows deductions for membership fees associated with business leagues, public service organizations, chambers of commerce, and professional organizations (e.g., bar associations, real estate boards, trade associations, etc.). Basically, the organization’s sole intention cannot be for entertainment or access to entertainment establishments. Read: No country club memberships.
Self-Employment Tax
The employer portion of self-employment tax can be considered a business expense, allowing it to be deducted from a self-employed person’s new business income.
Home Office
This includes any space in your home exclusively and frequently used for your business. Deductions can include a portion of your mortgage payment, property taxes, and utilities costs, among others.
Insurance Premiums
Business-related insurance premiums can count as tax deductions. This includes premiums for health insurance, long-term care plans, commercial auto insurance, and even liability insurance. Keep records of your payments throughout the year.
If you’re not sure where to start, this tax preparation checklist can help guide you. When in doubt, seek out a CPA for the tough questions.
Coverage and discounts are subject to qualifications and policy terms and may vary by situation. © 2025 Texas Farm Bureau Insurance
