Are you an educated tax-saver?
Here are some tax credits you may not know are out there: The Hope and Lifetime Learning Tax Credits aim to help families pay for college or job-training to upgrade their skills. Some 4.8 million families claimed these credits in 1998, the first year they were available. But as many as 9 million families may be eligible for such tax relief. If you're one of them, don't forget that you can file an amended tax return to take advantage of the credits you missed last year. "These tax credits can make a difference in a family's ability to afford training or college courses," says US Education Secretary Richard Riley. "I encourage all eligible families to take full advantage of these valuable tax credits."
Here are some guidelines to help you figure out if you or members of your family qualify for a little help from Uncle Sam to improve your skills:
*The Hope tax credit allows families to claim up to $1,500 for each child in their first two years of a college education. Students must be enrolled at least half time at an eligible educational institution, and there is no limit on the number of students in a household who can claim this credit.
*The Lifetime Learning tax credit covers any vocational, college, graduate, or professional student, including adults who are trying to upgrade their job skills. Filers can claim a credit up to $1,000 - 20 percent of the first $5,000 paid in qualified tuition and fees. Filers can claim only one Lifetime Learning credit per tax year, but there is no limit on the number of years such a credit can be claimed.
*Both tax credits are phased out for joint filers who have between $80,000 and $100,000 of adjusted gross income, and for single filers who have between $40,000 and $50,000 of adjusted gross income. (Four-fifths of the families claiming the credits in 1998 had an adjusted gross income of less than $80,000 in 1998.)
*Taxpayers cannot claim both credits for the same student in the same tax year.
*Qualified expenses include tuition and required fees. Room, board, and books are not covered.
You will need to submit IRS form 8863 with your federal tax form to take advantage of the credits. For further information, call the IRS Help line at 1-800-829-1040, read IRS publication 970, or go to the Treasury Department online at www.irs.gov.
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