Sunday, July 6, 2008

Hope and Lifetime Education Credit

Student higher education expenses For 2007, if your adjusted gross income isn't more than $65,000 ($130,000 on a joint return), you can get an above-the-line deduction of as much as $4,000 for any higher-education expenses you paid. Now, the law expires after 2007. So, again, this is one that bears watching, although I see the break getting renewed.
See if you qualify for the Hope and Lifetime Learning credits. The Hope credit is worth as much as $1,650 per student subject to income limits for 2007 and $1,800 for 2008. The Lifetime Learning credit is worth as much as $2,000 per return. Compare the credit with the deduction, and go with the one which gives you the biggest benefit. And, if you don't qualify for either credit, you may be able to deduct up to $4,000 in education expenses in 2007 and, one hopes, in 2008. Again, Congress has to renew the break.

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