“In this world, nothing can be said to be certain except death and taxes.”
That well-known phrase, popularized by American founding father Benjamin Franklin, is one of the most famous idioms regarding the nature of society. In fact, it is true to the point of irony, since Franklin did not coin the phrase as is widely credited; it first appeared in a comedic play some 70 years before Franklin penned it in a 1789 letter. Regardless, the message remains as fundamental as ever, describing the inevitability of Father Time and the taxman.
Wage and salary earners know well the latter half of the duo. Each year at this time, millions of American workers and companies are knee-deep in the often-arduous task of gathering materials and making the trek to a tax preparer or certified public accountant for an annual rite of spring.
While the requirement to file affects roughly the same percentage of the working public as in past years — any person making $15,750 or more for single filers with higher earnings thresholds for head of household, 65 and older, or married taxpayers filing jointly, the Internal Revenue Service states — the manner in which people are complying is changing fast.
Last year, almost half of the people filing electronically, which is about 93 percent of filers overall, prepared their own returns, according to Next Gen Personal Finance. Younger earners making less led the way — 67 percent of people ages 18 to 24 prepared their own returns, well ahead of every other age group. While that obviously comes at a cost savings, it also opens up the amateur to missing out on certain deductions compared to working with a live, trained professional.
That is especially true in 2026, when various elements of the One Big Beautiful Bill Act kick in, said Deron Hamilton, who, with Neil Denman, founded Denman, Hamilton & Associates in Little Rock.
Neil Denman, left, and Deron Hamilton
“From my perspective, this is going to be one of those tax years that it’s advantageous to get with a professional,” he said. “People need someone who understands this new Big Beautiful Bill, along with a lot of the other things that are available to individuals and business owners.”
Hamilton specifically noted several elements of the tax code, starting with cessation of taxes on tips and overtime.
“This is new and, I think, really interesting,” he said. “There’s an exemption on tip income up to $25,000, and that’s a big deal. However, there are some phase-outs if a person’s income is over certain levels, so it’s important to know that in order to know if you qualify.
“As far as tax on overtime, historically all income has been subject to income tax, but one of the new things in the One Big Beautiful Bill is there is certain overtime that is actually exempt from taxes. For example, I make $20 an hour, and then I work an extra 15 hours at $30 an hour, at time and a half. Well, that extra overtime now would be exempt, meaning you can take that as a deduction even if you use the standard deduction versus being itemized.”
Hamilton also pointed out changes to the state and local tax deductions, those levied on such things as real estate and personal property. Again, an income-based phaseout applies to that perk but for the taxpayers who qualify, the change represents potentially big savings.
“For the last few years, we’ve been limited to the amount of those types of taxes that we can deduct on an itemized tax return to $10,000,” he said. “For this year, that deduction actually went up to $40,000, so that is what I would consider a major win for the taxpayer. I’m a big fan of this.”
Another easily missed change is a rule affecting the ability to deduct interest on an auto loan.
“A long time ago, this used to be a staple deduction. Then, for quite a while, they disallowed deducting car loan interest,” Hamilton said. “Well, this year, there’s actually a rule in place where you can deduct up to $10,000 of auto loan interest. It’s an above-the-line deduction, meaning you can deduct this whether you use the standard deduction or you itemize.”
Hamilton said working through an experienced tax professional is not only crucial to knowing about such deductions but knowing their caveats and limits. For example, to qualify for the auto loan interest deduction, the taxpayer must have purchased an auto assembled in the U.S. Note that does not automatically mean a U.S.-based automaker but where the vehicle was put together. Thus would the driver of a Nissan Titan pickup assembled at the Japanese company’s Mississippi plant qualify for the tax break, while the driver of Detroit-based Ford’s Ranger, assembled in Argentina or Nigeria, would not.
On the other side of the coin, Hamilton said going through a reputable tax professional can also prevent a taxpayer from getting too aggressive when it comes to deductions, which is a surefire way to trigger an audit. He said that applies equally to personal and business returns.
“Usually I consider it questionable activity when I see an excessive amount of expenses with a very small amount of income. A business that generates $1,000 in retail sales but has 17,000 business miles is a red flag,” he said. “Same thing with business meals and travel, which comes down to intent. A family goes to Orlando, goes to Disney World for a week, it’s a $20,000 trip, and they bring that in to me and say, ‘I used my business credit card. I want to write it off as a business expense.’
“The question becomes, well, what did you do in Orlando that would make this a business expense? Just thinking about your business while you’re there isn’t enough. The key concept is intent. Same for business meals; if you have the intent to conduct business, engage clients or engage the team you’re working with, that is a deductible business expense, but even then, documentation and external support outside of a receipt, like a meeting notice, is critical if you ever get audited and you have to back up your claim.”
DON’T TAKE OUR WORD FOR IT: This article is intended to provide general information on a tax-related subject and does not constitute actual tax advice. Consult a qualified tax professional for the best strategy for your individual situation.
Would You Believe?
In 1913, the IRS 1040 form was comprised of a three-page worksheet and one page of instructions. The tax code has grown substantially more complex since then and, with it, brought some strange twists both to what is taxable and what deductions can be claimed.
Uncle Sam will always get his cut — Tax Freedom Day is April 16 this year, meaning the average American works 4 1/2 months just to break even with last year’s tax bill — but there are ways to take some of the edge off. The following is a collection of some of the stranger deductions that are completely legit as of 2025.
SHAKE YOUR MONEYMAKER
Breast implants and other cosmetic surgery can be deducted as a business expense for certain jobs, such as exotic dancers and other adult entertainment performers, if it can be shown said enhancements can be reasonably claimed to increase earning potential. (Investopedia)
Fur Babies
Some pet-related deductions include cat food purchased to attract stray cats to keep a business property rodent-free; food and vet expenses for dogs kept to guard a commercial property; and costs associated with pets during a family’s move to a new residence. (Investopedia)
Thar She Blows
The good news: Captains of whaling ships can deduct up to $10,000 of ship repairs and equipment purchases. The bad news: Whaling is banned in the U.S. outside of very narrow exceptions for some Native cultures. (Intuit TurboTax)
Virtue Perks
Looking for a financial incentive to get healthy? You may be able to deduct smoking cessation materials; residential swimming pool costs if swimming is prescribed by a physician; yoga if prescribed by a physician; and a variety of other items, under doctor’s orders, to reduce cholesterol, improve cardiovascular function or drop weight as a medical necessity. (Intuit TurboTax)
One Deduction Now Versus Several Little Ones Later
The cost of one’s condoms may be deducted as a medical expense. (Investopedia)
Clarinet Therapy
Kids’ teeth jacked up? The answer may lie with clarinet lessons; both the lessons and the instrument are deductible under a 1962 provision adopted after orthodontists affirmed playing the clarinet can assist in correcting an overbite, making it a medical expense. (Intuit TurboTax)
Augusta Rule
The Masters, professional golf’s first major tournament of the year, has grown to so overwhelm the city of Augusta, Georgia, that residents flee the city ahead of the crowds in droves, many renting their properties to golf patrons. The Augusta Rule grew out of the phenomenon and allows people to rent a property for up to 14 days a year without paying income tax on the proceeds. (Investopedia)
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