Tax Tip of the Week
900 N. Kings Highway, Cherry Hill, New Jersey 08034
856.667.4100 ·
215.563.0276 ·
Fax: 856.667.3652
For the week of
June 19, 2000
Don't miss your education tax credits
Two new education tax credits first became available in 1998.
They are intended to help families struggling to cope with the increasing costs of college and higher education.
However, tax breaks only benefit those who take advantage of them. Due to the complexity of the education tax credit
provisions, many of these credits are going unused.
Here is a recap of the main provisions of these credits:
Hope credit: For the first two years of college, this provision allows a tax credit of up to $1,500 per student,
per year. The credit is computed as 100% of the first $1,000 in qualified tuition and fees, and 50% of the next
$1,000. The credit can be claimed for expenses for yourself, your spouse, and your dependents.
Lifetime learning credit: This credit of up to $1,000 per year, per family can be taken for
study in any year without limitation on the number of years. The credit is computed at 20% of qualified tuition
and related expenses incurred for the year. Courses to acquire or improve job skills also qualify for the credit.
However, you need to be aware that:
- To get the full credit, your adjusted gross income (AGI) must be under $80,000 ($40,000 for singles). If your AGI is higher, you get a partial credit until your AGI reaches $100,000 ($50,000 for singles).
- The Hope credit and lifetime learning credit may not be taken for the same student in the same year.
Please contact us. We will gladly assist you with these and other tax matters. It is our job to see that you pay no more tax than the law requires.
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without further details and/or professional assistance.
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