John M. Hoffman & Associates CPAs

Frequently Asked Tax Questions

Education Deductions and Credits 

Education Credits

Hope Education Credit

• The Hope Education Credit is available for the 1^st two years of post secondary (first two years of college essentially) tuition. This is a sizeable credit and you do not need to spend a lot to get a large credit.

• The credit for 2008 is equal to 100% of the 1^st $1,200 of qualified tuition and 50% of the next $1,200 of qualified tuition.

• The annual maximum Hope Education Credit for 2008 has increased from $1,650 to $1,800. Please realize that, for example, if you sent your child to a community college and the tuition was $2,400, and you are eligible for the maximum credit, the government gives you $1,800 back towards your income tax.

• The Hope Education Credit is calculated on a per student basis so if those are your twins going to that community college, you may get a credit of $3,600.

• Education credits phase out at "MAGI" between $48,000 and $58,000 (single taxpayers) and between $96,000 and $116,000 (married taxpayers).