Educational Tax Credits.

Did you know that you could be getting paid for sending your child to college? The Hope Scholarship Credit and the Lifetime Learning Credit are two ways you could do just that. By claiming a tax credit against your federal income tax for tuition and related college expenses, you could be eligible to receive money back from the IRS.

The Hope Scholarship Credit is applicable paid toward higher learning between January 1, 2007 and December 31, 2007. The credit amount is 100% of the first $1,100 spent, and 50% of the next $1,100 spent, making the maximum amount $1,650 each year. Unfortunately the credit can only be claimed for the first two years of each eligible student’s education and if it is more than the student’s tax liability you receive the lesser amount. In order to qualify for the Hope Credit, students must fulfill the following requirements: must be enrolled in the freshman or sophomore years of college, must have enrolled in a program that leads to a degree, certificate, etc., must have taken at least one-half of the normal full-time workload for at least one academic period during the calendar year, and must be free of any felony conviction for possessing or distributing a controlled substance.

The Lifetime Learning Credit is similar to the Hope Credit in that it provides some relief to college expenses. However the Lifetime Learning Credit offers a credit up to $2,000. The credit amount is 20% of the first $10,000 spent, but if the student’s tax liability is less than you receive the lesser amount. In order to qualify for the Lifetime Learning Credit, students must be enrolled in one or more classes including undergraduate and graduate level degree work or continuing education work to improve job skills.

Both the Hope Scholarship Credit and the Lifetime Learning Credits can be claimed by students who have paid tuition and are not claimed as dependents by another taxpayer (parents). If the student is claimed as a dependent, the parents may file for the students. If the student has a single parent who makes over $57,000, or married parents filing jointly that make over $114,000, then the parents cannot claim the credit. The student, however, can claim it as long as he/she has a liability to the IRS.

For more information call Geoff at: CALL 1 (888) 462-8297.