WASHINGTON — Call them money savers: There are some new deductions you can claim on your taxes this year, and some you may have never heard of.
Did you make a big purchase last year, such as a car or a boat? You can change how you file your taxes to optimize your return, says Janet Bodnar, editor of Kiplinger’s Personal Finance.
“You have a choice between deducting state and local income tax or state and local sales tax, ” Bodnar says.
She said homeowners can consider another deduction that was just renewed by Congress.
“You can deduct your mortgage insurance premiums. There are some restrictions, like income restrictions, and you also have to had taken out this mortgage after 2006,” she says.
Other suggestions from Kiplinger Personal Finance include:
- Reinvested dividends: This isn’t a tax deduction, but it is an important subtraction that can save you a bundle.
- Out-of-pocket charitable deductions: Little things add up, and you can write off out-of-pocket costs incurred while doing work for a charity.
- Student loan interest paid off by parents: If parents pay back a child’s student loans, the IRS treats the transactions as if the money were given to the child, who then paid the debt. So as long as the child is no longer claimed as a dependent, he or she can deduct up to $2,500 of student-loan interest paid by parents each year.
