October 2000 On-line Tax Planning

Save on Your 2000 Taxes

Take Credit For Higher Education

HOPE Credit for undergraduates.  Up to $1,500 per student per year.  HOPE Credit applies only for the first two years of post-secondary education - such as college or vocational school.  It does not apply to graduate and professional level programs.

You're allowed 100% of the first $1,000 of qualified tuition and related fees paid during the tax year plus 50% of the next $1,000 - for a maximum credit of $1,500 per eligible student per year.  The student must be enrolled at least half-time.

This applies to expenses paid after December 31, 1997 for academic periods beginning after that date.  See qualifications below.

Lifetime Learning Credit for graduate or undergraduate study.  Up to $1,000 per year.  The Lifetime Learning Credit applies to graduate level and professional degree courses, as well as undergraduate courses, including instruction to acquire or improve job skills.

If you qualify, your credit equals 20% of the post-secondary tuition and fees you pay during the year - limited to a maximum credit in 1999 of $1,000 per year.

Note:  In the year 2003, the maximum Lifetime Learning Credit will increase to $2,000 per year.

The Lifetime Learning Credit can be used for an unlimited number of years - starting with expenses paid after June 30, 1998 for academic periods beginning after that date.  See qualifications below.

You can't take both credits at once.  You cannot claim both the HOPE and Lifetime Learning Credits for the same student in the same year.

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For More Information Contact:

Bucheri McCarty & Metz LLP
2366 W. Boulevard
P.O. Box 2147
Kokomo, IN  46904-2147

Telephone: (765) 236-2300
FAX: (765) 236-2333
Internet: info@bmmcpas.com