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Seven little-known tax write-offs

Nov 18, 2011, 8:37 a.m.

Death and taxes are the only certainties in life. The good thing is that with taxes, at least, you can use deductions to legally lower the amount that you are required to pay. Here are seven little known tax deductions that can help you reduce your tax bill.

Refinancing points: If you recently refinanced your home, the points paid for the mortgage are tax deductible over the life of the mortgage. For example, if you have a 15 year loan, each year 1/15th of the points paid can be deducted.

Inherited IRA assets: If you were fortunate enough to inherit an IRA, you can take a deduction for the amount of estate taxes the IRA paid on the assets you received.

Student loan interest paid by you: If your child has a student loan that you pay, your child can deduct up to $2,500 in interest even though you pay it. The interesting thing about this deduction is it can be taken without itemizing.

Jury pay turned over to your employer: This is a weird one. Some employers require jurors to turn over their jury pay to the company. Generally, this happens when the company continues to pay the employee regular wages while at jury duty. You can deduct this turned-over pay from your taxes.

Sales tax deduction for new vehicles: In an effort to spur auto sales, the IRS allows most to deduct the sales tax paid on new vehicles.

Making Work Pay credit: This credit provides a refunable tax credit mandated by the Feds. See IRS Schedule M to see how you can get up to an additional $400 of deductions on your tax return.

Casualty loss deduction: A casualty loss deduction is a tax deduction that can be taken if the tax payer suffers out-of-pocket losses due to a casualty. While it is generally well known that those who itemize can deduct casualty losses, those who don't itemize can deduct casualty losses, as well. This is if the loss occurred in a presidential designated disaster area.

Always remember to check with your tax adviser prior to taking any deductions.

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