Smith & Gesteland Quick Tip

Education Tax Credits Continue to Offer Help

As you complete your 2001 tax return, you'll want to determine if you are eligible for one of two education credits. The Hope Scholarship Credit allows taxpayers to claim a credit of up to $1,500 (100% of the first $1,000 of tuition and fees, and 50% of the next $1,000) per qualified student for the first two years of post-secondary education in an eligible educational institution. The Lifetime Learning Credit, which can be used for an unlimited number of years, provides a total credit of up to $1,000 (20 percent of the first $5,000 of qualified tuition and related expenses) in higher education expenses per family each year. Both credits are phased out for higher income taxpayers. In 2002, the credits phase out for single taxpayers with AGIs of $40,000-$60,000 and for joint filers with AGIs of $80,000- $100,000.