Education credits

General overview (2005 tax year) of Educational credits (other criteria may apply):

Taken from IRS Publication # 970.

Hope credit -

This is generally for students in their 1 st and 2 nd year of college

Lifetime learning credit –

Modified adjusted gross income > $43,000, totally phased out at $53,000 (single)

Eligible expenses you've paid (in cash or through a loan) –

Required by institution

Tuition

Course-related books, equipment and supplies

Student activity fees and expenses

Work-related education –

Per the IRS:

• The education must be required by your employer or by the law to keep your present salary, status, or job. Must fill a bona fide business purpose of the employer.

• The education maintains or improves the skills in your present position.

The IRS goes on to say that, even if the education meets one or both of the above requirements, it is not qualifying work-related education if:

• It is needed to meet the minimum education requirements of your present trade or business.

• It is part of a program of study that will qualify you for a new trade or business.

Deductible expenses:

• Tuition, books, supplies, lab fees and other similar items

• Certain transportation and travel costs

• Other education expenses, such as the cost of research and typing when writing a paper as part of an educational program.

For all of the above programs, your deduction would be reduced by any tax-free educational assistance you may receive. This includes the tax-free part of scholarships and fellowships, pell grants, employer provided educational assistance, veterans' educational assistance, any other non taxable (tax free) payments (other than gifts and inheritances) received as educational assistance.

Note: Information is not all-inclusive and may change at any time.