Student Loan Interest

• If you are repaying student loans for your child and if you do not claim her as your dependent on your tax return, she can deduct up to $2,500 of the interest she paid on her student loans. You don’t get the interest deducted on their own taxes. The Internal Revenue Service treats your payments as money given to to the child.
  
  

Child Care Credit

• The tax credit for working parents is a tax credit rather than a tax deduction, but it allows you to reduce your tax obligation. Because you work, you have to pay for a private child care provider or day care center to take care of your child. If you have one child in day care, you can reduce your taxes up to $3,000; for two children or more under age 13, you are able to reduce your tax obligation by up to $6,000.
  
  A tax credit allows taxpayers to reduce their tax obligation dollar for dollar while a tax deduction relies on the taxable income. How much the taxpayer is able to deduct depends on his tax bracket. If he is eligible to claim a $500 tax credit, his tax bill decreases by $500. If he is in the 25 percent bracket, a deduction of $1,000 reduces his tax bill by only $250.
  
  Your gross annual income affects the percentage you are able to claim as a credit. If this amount is $43,000 or higher, you and your partner can file a claim of 20 percent for your child care expenses.
  
  

Mortgage Refinancing Deduction

• If you have refinanced your home mortgage, you paid points when you finalized the refinancing. As of the date of publication, you are able to deduct points on a monthly basis until you have paid off the new mortgage. This means you are able to write off $120 beginning in 2011 and in subsequent years until all points have been deducted, states the MSN Money website.
  
  

Charitable Donations

• If you made noncash donations to a charity such as the Salvation Army or Goodwill, you can deduct the value of the items you donated, such as clothing, kitchen items or furniture. Household items and clothing have to be in good condition if you want to take this deduction. As of the date of publication, the IRS requires a receipt proving you made the donation.
  
  

Opportunity Credit

• The American Opportunity tax credit has been extended through the end of 2012. This allows families to deduct up to $2,500 of college tuition and related expenses paid for the year. If you are an individual whose adjusted gross income is up to $80,000 or $160,000 for married couples filing a joint tax return, you are eligible for the full credit.
  
  This credit allows families with higher income limits to file for the claim over the full four years a child is in college. Better yet, if the amount of the credit is larger than your regular and AMT tax credit, it is partially refundable, writes the Kiplinger website.