Charitable contributions.  Your donations of cash and/or property to qualified charities are tax deductible.  When you give $250 or more, obtain a written receipt or other substantiation from the charity to support your deduction.  When non cash contributions top $500, the IRS has a special form that must be filed with your tax return.  There also is an appraisal requirement for larger gifts.

Are you a volunteer?  Be sure to keep track of any driving you do.  You can deduct either your actual  expenses or $.14 per mile plus parking and tolls.  If you travel overnight while on a charity's business, you can deduct the expense unless the trip contained a significant element of personal pleasure, recreation, or vacation.  Your out-of-pocket expenditures for materials, office supplies, and telephone calls made while volunteering are also tax deductible.  You can't deduct the value of donated time and services.

TIP You may deduct up to $50 per school month for housing an exchange student (grade 12 or lower) who is sponsored by a qualified organization.

Miscellaneous expense.  Investment management fees, professional fees for personal tax advice, and unreimbursed employee business expenses are among the expenses included in this category.  Note that your deduction for miscellaneous expenses will be limited to the amount by which the expenses exceed 2% of you AGI.

Itemized deduction limitation.  A recent IRS report reveals that a provision in the tax code limiting itemized deductions for higher income individuals cost over 4.8 million taxpayers almost $26 billion in itemized deductions--in one year alone.  The reduction applies when AGI exceeds $132,950 ($66,475 if married-separate; these estimated thresholds are subject to inflation adjustment each year).  In essence, this limitation increases the effective tax rate paid by affected individuals.

Exemptions.  In computing your taxes, you can subtract a certain dollar amount (an estimated $2,900 for 2001) from your income for each