DEDUCT THIS!
Itemizers can now deduct state and local sales tax instead of income tax--a boon for those in income-tax-free states like Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Didn't hold on to old sales receipts? IRS Publication 600 lists optional tables to figure out deductions.
SCHOOL AID
You can now deduct a maximum of $4,000 (up from $3,000) for qualified higher-education expenses for you, a child or a spouse. Your adjusted gross income must be no more than $65,000 ($130,000 if you are married filing jointly). This deduction disqualifies you from taking Hope or Lifetime Learning credits.
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