Can you really claim that deduction? Some of the tax deductions you hear about most often are actually quite difficult to qualify for. It's important to understand how these deductions work, so you don't anticipate tax savings that you won't receive. Here are the rules and limitations you should be aware of for five common deductions.

Medical and Dental Expenses
Medical and dental expenses are tax deductible, but the qualifications you must meet to benefit from this deduction are so high that most people won't meet them. That's because you can only deduct medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI). Starting in 2013, that threshold will rise to 10%.

Let's look at an example of how this deduction works. Let's say your AGI, which is your gross income minus above-the-line adjustments like student loan interest, moving expenses and contributions to self-employed retirement plans, is $60,000. Your AGI is higher than your taxable income because it doesn't take into account your standard or itemized deductions or exemptions for you, your spouse or dependents.

With a $60,000 AGI, to take any deduction for medical and dental expenses you'd need to have more than $4,500 of qualifying expenses in this category. Then, only those expenses in excess of $4,500 would be deductible.

Remember, the value of a deduction is equal to your marginal tax rate, so if you had $5,500 in qualifying medical and dental expenses, you could take a $1,000 deduction. With a marginal tax rate of 25%, this deduction would save you $250 on your federal return. It would not, as some people think, save you $5,500. For more information about this deduction, consult IRS publication 502.

Tax Preparation Expenses
Similar to medical and dental expenses, tax preparation expenses are only deductible to the extent that they exceed 2% of your AGI. Assuming the same $60,000 AGI as in the previous example, your tax prep costs would have to exceed $1,200 before you could deduct anything.

If you do your taxes yourself with the assistance of tax software, you're probably spending less than $100 to prepare your taxes, and you won't get any deduction. If you hire a tax professional who charges you $2,000, you could deduct $800 ($2,000 - $1,200). Again, assuming you're in the 25% tax bracket, this deduction would save you $200. That's a mere 10% of what you paid to have your taxes prepared, and a far cry from the $2,000 savings you might have anticipated.

Job-Hunting Expenses
Like tax prep fees, job hunting expenses are only deductible when they exceed 2% of your AGI. But job-hunting expenses have another catch - you can only deduct them when you're looking for a new job in your present occupation. If you need to change occupations because your old job is no longer in demand, you can't deduct your job hunting expenses. The only good news about this deduction is that you can deduct your expenses even if you don't land a new position.

Charitable Donations
Gifts and donations to qualified charities can help you reduce your tax bill, but only if you itemize your deductions. If you take the standard deduction, you won't see any tax benefit from your charitable donations.

There are some further limits on what you can deduct in this category. If you receive any type of benefit in exchange for your donation, you must subtract the value of the benefit from your deduction. This means that, for example, if you donate $100 to a nonprofit and receive a $10 magazine subscription as a benefit, you can only deduct $90, not $100, on your tax return.

If you make a gift of $250 or more, whether it's in cash or goods, the nonprofit must supply you with a receipt stating the amount of any financial donation or a description of any donated property and whether you received anything in return. You don't have to file this statement with the IRS, but if you're later audited and you don't have it, your deduction may be disallowed and cost you money in taxes, penalties and interest.

If you donate property worth more than $500, you have to fill out IRS form 8283 providing details about your donation. The $500 limit applies to all donated property for the year, not to each donation. It's not hard to hit this threshold even if you're only donating household items like clothing and furniture.

Student Loan Interest
Student loan interest is more valuable than many other deductions in the sense that it's an above-the-line deduction. This means you can claim it even if you don't itemize. It also reduces your adjusted gross income, making it easier to qualify for deductions on medical and dental expenses, tax preparation fees and job-hunting expenses.

However, the student loan interest deduction is limited to $2,500 no matter how much you actually paid in interest that year. If you pay $1,000 in student loan interest, you can deduct all $1,000, but if you pay $3,500, you can only deduct $2,500.

But that's not all. If you make too much money, you lose this deduction. The deduction phases out when your modified adjusted gross income (MAGI) reaches $60,000 if you're a single filer and $120,000 if you're married filing jointly. Single filers lose the deduction once MAGI reaches $75,000 and married couples lose it at $150,000.

Finally, if your filing status is "married filing separately," you can't claim the deduction at all. See IRS publication 970 for full details on the student loan interest deduction.

The Bottom Line
Some tax deductions aren't as valuable as they appear to be at first glance. If you don't understand how they work, you might end up with an ugly surprise at tax time in the form of a tax bill that's higher than you expected. Read the fine print about any deduction or credit you're considering before you plan to claim it.