3. Job hunting costs
While college students can't deduct the costs of hunting for that new job across the country, already-employed workers can. Costs associated with
looking for a new job in your present occupation, including fees for resume preparation and employment of outplacement agencies, are deductible as long as you itemize. The one downside here is that these costs, along with other miscellaneous itemized expenses, must exceed 2 percent of your adjusted gross income before they produce any tax savings. But the phone calls, employment agency fees and resume printing costs might be enough to get you over that income threshold.
4. Military reservists' travel expenses
Members of the military reserve forces and National Guard pay many prices to serve their country. The IRS gives back a little by allowing them a deduction for travel expenses to drills or meetings. To qualify, you must travel more than 100 miles and stay overnight for the training exercises. In these cases, service personnel can deduct the cost of lodging and half the cost of meals. If you drive to the training, be sure to track your miles. You can deduct them on your 2007 return at 48.5 cents per mile (50.5 cents a mile in 2008), along with any parking or toll fees for driving your own car. You get this deduction whether or not you itemize, but you will have to fill out
Form 2106.
5. Child, and more, care credit
Every parent knows about the Child and Dependent Care tax credit. Millions claim it each year to help cover the costs of after-school day care while mom and dad work. But some parents overlook claiming the credit for child care costs during the summer.
"It also applies to summer day camp costs," says Scharin. The key here is that the camp is a day-only getaway that supervises the child while the parents work. You can't claim overnight camp costs. Remember, too, the dual nature of the credit's name: child and dependent. If you have an adult dependent who needs care so that you can work, those expenses can be claimed under this tax credit.  Watch "Children as tax deductions"
6. Mortgage refi points
When you buy a house, you get to
deduct the points paid on the loan on your tax return for that year of purchase. But if you refinance the house or buy a second residence, those loan points can only be deducted incrementally each year over the life of the loan.
There is, however, an exception to this drawn-out refi loan points deduction. "If you sell the home or refinance again before you have deducted the full amount of points you paid, you can deduct that remaining amount in the year of the subsequent refinancing or sale," says Scharin. replacecontent-tcm:8-4564 The one rule to be aware of here is that in order to get the full points deduction on a second refi, the loan must be with a different lender. If you refinance with the original lending institution, you must add points on the latest deal to the leftovers from the previous refinancing and continue to deduct the expense ratably over the life of the new loan. |