Taxes are inevitable, but many Boston-area taxpayers overlook deductions that could save them money. For example, Massachusetts recently expanded its renter deduction: half of up to $8,000 in rent (50%) is now deductible, raising the cap to $4,000 (source). Likewise, commuters who pay MBTA passes, regional transit, or even e-bike and bikeshare fees can deduct up to $750 (source). Moreover, the state now allows charitable donations to be deducted on your Massachusetts return, and federal rules let you deduct student loan interest (up to $2,500) (source). We explain five often-missed deductions for Boston residents below. In each case, our friendly tax pros at Vaesca can help you claim these benefits, so you keep more of what you earn (see our Tax Filing and Book Keeping services).
Table of Contents
Massachusetts Renter Deduction
Commuter Tax Deduction
Student Loan Interest Deduction
Self-Employment and Home Office Deductions
Charitable Contribution Deduction
Next Steps / Get Help
Massachusetts Renter Tax Deduction
Many Boston-area renters don’t realize they have this state deduction available. However, thanks to legislation in 2023, the cap is now $4,000 (source). For example, if a couple pays $2,000 in rent each month, they’d normally expense $12,000/2 = $6,000 (capped at $4,000) as a deduction on their Massachusetts return. Even if you take the standard federal deduction, this state deduction still applies. Our team can help you complete Schedule Y or Form 1 to claim the rental credit. Claiming this credit can significantly reduce your Massachusetts taxable income for the year. (See our Tax Filing service for help preparing your return correctly.)
Commuter Tax Deduction
If you commute to work, you may qualify for the state commuter deduction. For tax year 2023 and after, Massachusetts expanded this deduction (source). It now covers expenses for MBTA passes, Massachusetts regional transit fares, commuter boat fares, and even bicycle purchases or bikeshare memberships used for commuting. In effect, any “normal commuting expense” over $150 per year can be deducted, up to a $750 limit. For example:
MBTA weekly or monthly passes (subway, bus, commuter rail)
Regional transit authority fares
Commuter boat or water taxi fees
Paid tolls (e.g. Boston tunnels/E-ZPass)
Bicycles or annual bikeshare memberships used for commuting (purchase, improvements, storage)
You deduct only amounts over $150. For instance, if you spent $900 on an MBTA monthly pass over the year, you can claim $900–$150 = $750 on Schedule Y. This helps Boston-area riders trim their state tax bill. Our tax pros can walk you through the required forms and documentation so you don’t miss this commuter break.
Student Loan Interest Deduction
Boston-area families with student debt or education costs can take advantage of federal deductions. For example, up to $2,500 of student loan interest (paid for yourself, your spouse, or your dependent) is deductible on your federal return as an above-the-line deduction (source). This means you can deduct the interest even if you do not itemize. Massachusetts also allows an undergraduate tuition deduction on state returns: you can deduct up to $2,500 for college tuition paid. These education deductions reduce your taxable income dollar-for-dollar. Make sure to include Form 1098-E (student loan interest statement) and/or tuition receipts with your paperwork. Our friendly experts can verify your eligibility and include these on your return, maximizing your savings.
Self-Employment & Home Office Deductions
Boston’s vibrant freelance and small-business community has its own tax write-offs. If you’re self-employed or have a side gig, you can deduct ordinary business expenses. Perhaps the biggest is the home office deduction: you may write off part of your rent/mortgage, utilities, insurance, and repairs for the home workspace (source). The IRS rules require “exclusive and regular” use of the area, but the deduction can be valuable. Other deductible costs include computer equipment, phone/Internet bills, professional fees, advertising, and business travel.
Don’t forget mileage or transit if you drive for work. Note that expenses used here must be properly documented (keep receipts and logs). If you keep thorough records, our Book Keeping service can help organize your receipts. Then our tax team will ensure deductions like home office are claimed correctly, directly lowering your taxable income by the full amount of your qualifying business costs.
Charitable Contribution Deduction
Boston-area taxpayers who give to charity should also check their deductions. Beginning January 1, 2023, Massachusetts now lets everyone deduct cash charitable donations on their state return. This applies even if you take the standard deduction on your federal return. For example, if you donated $1,000 to a qualified charity in 2024, you can subtract $1,000 from your Massachusetts taxable income. Keep your donation receipts or letters, because you’ll need them for documentation. This state deduction complements the usual federal charitable deduction (up to 60% of AGI for cash gifts). If you regularly donate to charities around Boston (like food banks, hospitals, schools), be sure to claim this state deduction.
Next Steps / Get Help
Beyond these five deductions, don’t forget standard breaks like the personal exemption ($4,400 each for 2024) or healthcare contributions to an HSA. Take a methodical approach: gather receipts for rent, commuting, student interest, home-office bills, and donations. The tax code can be complex, so consider reaching out for professional help. Our local Boston tax experts at Vaesca are happy to review your situation. We’ll double-check every possible deduction on your return.
Ready to maximize your refund? Contact us today to discuss how these deductions apply to you, or visit our Contact page to schedule a consultation.tax deductions Boston area
