 |
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· Education Credits &
Deductions - You can choose between two education tax credits, the
Hope Credit and the Lifetime Learning Credit and the Tuition and Fees
Deduction in 2005. |
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· Hope Credit -
The Hope Credit is a maximum credit of $1,500 for each eligible student
. |
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·
Lifetime
Learning Credit - Lets you take a credit of 20% of the first $10,000
you paid for qualified tuition and related expenses. |
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·
Tuition
and Fees Deduction - You may be able to deduct qualified education
tuition and related expenses that you pay. You do not have to itemize to
take this deduction. The maximum deduction is $4,000. |
|
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·
Educator Expense Deduction
- If you are an eligible educator, you can deduct from gross income up
to $250 in qualified expenses. You can deduct these expenses even if you do
not itemize deductions. |
|
· Student Loan
Interest Deduction - You may be able to deduct up to $2,500 for
interest you pay in 2005 on a qualified student loan. |
|
· U.S. Savings Bond Interest
Exclusion - The interest on qualified U.S. savings
bonds can be excluded from income if you paid qualified higher education
expenses, |
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·
Coverdell
Education Savings Accounts -
In general, the designated beneficiary of a Coverdell ESA
can receive tax free distributions to pay qualified education expenses. The
distributions are tax free to the extent the amount of the distributions do
not exceed the beneficiary's qualified education expenses. If a distribution
does exceed the beneficiary's qualified education expenses, a portion of the
distribution is taxable. |
