Revised $8,000 refundable tax credit for 1st
time homebuyers can be taken in 2009 even if
you have already filed your return. Now is the
time to make a move if you can! More to follow
stay tuned.

A tax tip from the IRS

February 16, 2009

In these challenging financial times many parents arelooking for ways to offset the cost of education for their children.  In addition, with unemployment rates steadily increasing, many workers are seeking additional education to increase their workplace value. 

The IRS has recently published information on two tax credits that may be an option for you and your family.

Education tax credits can help offset the costs of higher education for yourself or a dependent. The Hope Credit and the Lifetime Learning Credit are two education credits available which may benefit you. Because they are credits rather than deductions, you may be able to subtract them in full, dollar for dollar, from your federal income tax.

The Hope Credit

The credit applies for the first two years of post-secondary education, such as college or vocational school. It does not apply to the third, fourth, or higher years of undergraduate programs, to graduate programs, or to professional-level programs.
It can be worth up to $1,800 ($3,600 if a student in a Midwestern disaster area) per eligible student, per year.
You’re allowed a credit of 100% of the first $1,200 ($2,400 if a student in a Midwestern disaster area) of qualified tuition and related fees paid during the tax year, plus 50% of the next $1,200 ($2,400 if a student in a Midwestern disaster area).
Each student must be enrolled at least half-time for at least one academic period which began during the year.
The student must be free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of the tax year.

The Lifetime Learning Credit

The credit applies to undergraduate, graduate and professional degree courses, including instruction to acquire or improve job skills, regardless of the number of years in the program.
If you qualify, your credit equals 20% (40% if a student in a Midwestern disaster area) of the first $10,000 of post-secondary tuition and fees you pay during the year, for a maximum credit of $2,000 ($4,000 if a student in a Midwestern disaster area) per tax return.

Give us call at 804.321.5766 we would the opportunity to discuss these and other financial tips with you.