* Deductions for student loan interest: Taxpayers can deduct more of the interest they paid on student loans. Up to $2,500 can be deducted by workers who earn less than $40,000 if single or $60,000 if married and filing jointly. The catch: The interest must be for loans that are in the first 60 months of repayment.
Deductions for those who earn more than the threshold amounts will be reduced or eliminated based on a formula spelled out in the 10-line Student Loan Interest Deduction Worksheet.
* Relief for victims of terrorism: Federal income taxes owed by persons killed in the Sept. 11 terrorist attacks, last fall's anthrax scare or the 1995 Oklahoma City bombing were retroactively wiped away by a law signed in January. The law covers taxes for the year of the attackand the year before.
The estates of approximately 4,000 terrorism victims are due a minimum of $10,000 each. If a victim's total tax bill for those two years was less than $10,000, the survivors or executors of their estates can get a refund check for the difference.
The IRS expects to have guidance--Publication 3920--on how to claim terrorism-related refunds posted on its Web site at www.irs.gov later this month.
* Inflation adjustments: Some tax thresholds have been adjusted for inflation, including the break-points for marginal tax brackets and the thresholds for phasing out deductions.
The two inflation adjustments that the majority of taxpayers will use are:
* The standard deduction--the deduction for taxpayers who don't itemize--rises from $7,350 to $7,600 for married couples filing jointly; from $6,450 to $6,650 for heads of households; and from $4,400 to $4,550 for singles.
* The personal exemption--the tax deduction you get for yourself and each dependent in your household--rises from $2,800 to $2,900 each.
