Money: Tax Tips

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.

DRIVING AID

If you deduct car expenses, you’ll get an extra penny and a half per mile this year. The standard mileage rate: $0.375.

FILING AID

For do-it-yourself filers (about 45% of returns), the IRS gives free access to tax software from companies like H&R Block and TurboTax at irs.gov

LAST CHANCE

If you didn’t file a tax return for 2001, the IRS has $2 billion in refunds up for grabs, due some 1.7 million nonfilers. The door on this opportunity closes April 15.

–Sharon Epperson is CNBC’s personal-finance correspondent