Home Equity Loans - Interest paid from home equity borrowing used for paying off credit card balances, car loans, personal loans and other types of consumer expenditures are deductible up to $100,000 of home equity loans ($50,000 if married filing separately).  Home equity loans are expensive than other types of credit.  Interest on personal loans are not deductible.

Charitable Contributions - You may deduct as charitable deductions the cost of operation, maintenance, and repair of property directly related to the charitable organization's use of the property.  For example, if you donate the use of your limousene to the church for use in their raffle, no income tax deduction is allowed for the rental value of the donated use.  Direct operating costs, such as fuel and driver, used in connection with the donated use are allowable as charitable contribution.

Education Tax Credit - If you claim your child as a dependent, only you may claim the education credit for the child's qualified tuition and related expenses.  If, however, you are eligible to claim your child as a dependent but choose not to do so, your child may claim the education credit for his or her qualified tuition and related expenses even if the tuition and expenses were paid by you.

Earned Income Credit - You must file a tax return to receive the earned income credit.  If the tax you owe is less than the amount of the earned income credit, you will receive a refund from the government.  Therefore, even if you are not required to file a tax return because your income is less than the income required to file, you still must do so in order to receive the credit.

Trade or Business - If you have more than one trade or business, you must combine the net earnings from each business to determine your net self-employment income.  A loss that you incur in one business will offset your income in another business.

Refinancing Points - If you have refinancing and paid points for the loan, you can deduct the points proportionately each year over the term of the new loan.  If you refinance the same loan or sell your home before you have deducted the full cost of your points, you can deduct the remaining amount in the year of refinance or sale.

Income Tax Audit - Most taxpayers' returns are accepted as filed.  But if your return is selected for examination, it does not suggest that you are dishonest.  The examination or inquiry may or may not result in more tax.  Your case may be closed without change. Or, you may receive a refund.  Keep your receipts and other documentation of deductions for at least six years.  For long-lived assets such as your home and other real estate properties, keep the supporting papers as long as you own the property and at least six years after you disposed off the property.