What kind of expenses qualify as tax deductions?

Home mortgage interest and charitable donations are considered tax-deductible expenses because they are explicitly allowed under tax regulations.

When you pay interest on a loan secured by your primary residence, that mortgage interest can often be deducted from your taxable income, significantly reducing the amount of tax owed. This provision is designed to encourage home ownership, thus making housing more affordable.

Charitable donations are also eligible for tax deductions. When you donate to qualifying charitable organizations, you can typically subtract the amount of your donations from your taxable income. This encourages philanthropy and support for non-profit organizations, further incentivizing individuals to give back to their communities.

In contrast, personal savings contributions do not qualify for a tax deduction, as they are not considered an expense. Similarly, expenses related to personal leisure activities and unclaimed investments lack a direct connection to generating income or supporting charitable causes, making them ineligible for tax deductions under normal circumstances.