CHICAGO (Tribune Media) - Millions of individuals will be able to take more advantage of some personal tax breaks on 2001 income tax returns.

Many college grads with student loans to pay off will be eligible to deduct more of the interest.

Homeowners who refinanced their mortgages to take advantage of last year's drop in interest rates may be able to claim some extra mortgage deductions.

And many Americans who donated to disaster relief efforts in the wake of the Sept. 11 terrorist attacks will find their generosity rewarded this tax season.

Up to $2,500 in interest paid last year on college loans will be eligible for the student loan deduction on 2001 returns. That's up from $2,000 in 2000.

But there are numerous restrictions that make the deduction elusive for many people. For one thing, the deduction starts to phase out for married couples with adjusted gross incomes above $60,000 and singles with incomes above $40,000.

Only loans that are used strictly for college expenses are deductible. Mixed-use loans don't qualify.

And children who took out student loans aren't allowed to deduct any interest payments in years that they're claimed as dependents on their parents' returns.

Qualifying will be easier starting on 2002 tax-year returns when the 2001 tax act increases the income-eligibility limits and no longer limits the deduction to the first five years in which interest payments are required on the loan.

If you were among the many homeowners who refinanced their mortgages last year, any "points" you may have paid to your lender generally must be deducted gradually over the life of the loan.

But there are a couple of situations in which you may be able to deduct more. One is if you used part of the loan proceeds for home improvements. Points on that portion of the loan can be deducted in full -- provided you paid the points out of your own private funds rather than out of the proceeds of the loan.

If this wasn't the first time you refinanced the mortgage, you may be able to write off some extra points. Any points paid in connection with your previous refinancing that you haven't yet written off can be deducted on your 2001 return.

President Bush has proposed allowing taxpayers who claim the standard deduction to write off a limited amount of their charitable contributions in the future. But on 2001 returns, charitable donations can be written off only if you itemize deductions.

If you do itemize, how much of a charitable deduction you'll be able to claim will depend not only on how much you gave but also on the types of gifts you made.

Cash contributions are straightforward. Whether you donated a few dollars at a Sunday church service or wrote a large check to a disaster relief organization, you can generally claim a charitable deduction for the full amount of your donation.

If you gave used items, such as clothing or furniture, your deduction is limited to what the items would sell for in a consignment or thrift shop.

If you gave appreciated stock or mutual fund shares that you owned more than one year, you can generally deduct the market value of the shares at the time of the donation. (You'll also escape capital gains tax on the appreciation.)

Fund-raiser tickets: If you bought a ticket to a benefit concert or some other fund-raising event, you generally can't deduct the full price of admission as a charitable contribution.

In figuring your deduction, the value of any benefit received -- such as the cost of the food or entertainment -- must be subtracted from the ticket price.

For example, say you bought a $100 ticket to a benefit dinner held to raise funds for Sept. 11 relief efforts. If the value of the meal was estimated at $60, only $40 of the ticket's cost is deductible.

The only situation in which you can deduct the full cost of the ticket is if you returned the ticket to the charity before the event.

How much the food and entertainment was worth should be disclosed right on the ticket or invitation. Charities are required to provide a written estimate of the value of benefits to be provided when selling fund-raiser tickets that cost more than $75.

Blood banks: Many thousands of Americans responded to the Sept. 11 attacks by donating blood to the Red Cross and other blood banks. But donations of blood aren't eligible for the charitable deduction.

Volunteers: No charitable deduction is available for the value of your time or labor in helping a charitable organization. But volunteers can deduct out-of-pocket expenses, such as long-distance phone calls and transportation.

Gifts to individuals: Only donations to qualified charitable organizations are deductible. Donations to a particular individual, no matter how needy or worthy, can't be written off.