ROTH CPA & ASSOCIATES, LLC

10751 Montgomery Road

Cincinnati, OH 45242

513-530-9000

¨ Child Tax Credit

           The Child Tax Credit allows you to reduce your federal income tax            by $1,000 for each qualifying child under the age of 17. This

           credit begins to phase out if your modified AGI is above $110,000            for joint filers, or $75,000 for single or head of household filers.

 

¨ Dependent Care Credit

           Parents who must pay for the care of a dependent under age 13

           In order to work may be eligible for a tax credit of between 20               percent and 35 percent of qualifying expenses. For 2008, the            maximum amount of expenses on which the credit can be claimed            is $3,000 for the care of one dependent or $6,000 for two or

           more.

 

¨ Education Tax Benefits

           Even if you don't itemize, you can save money with these education

             credits and deductions.

§ Hope Credit — A credit equal to 100% of the first $1,100 and

50% of the next $1,100 per student for tuition and related fees, with

a credit maximum of $1,650 per student. It's restricted to the first 2

years of college and can be claimed only twice per student.

§ Lifetime Learning Credit — A credit of 20% of your annual tuition

and related fees, with a credit maximum of $2,000 per return. The

credit may be claimed for an unlimited number of years.

§ Tuition and Fees Deduction — You can deduct up to $4,000 per

student for tuition and fees.

§ Student Loan Interest Deduction — Deduct up to $2,500 per

return for interest paid on student loans.

§ Exclusion for Savings Bond Interest — Some or all of the

interest received from eligible bonds issued after 1989 may be

excludable if qualified higher education for the year are at least as

much as the proceeds of the redeemed bonds.

 

¨ 529 Plans

           The tax benefits of 529 college savings plans, which were to

           expire in 2010, are now a permanent part of the tax code. These            plans give parents and other relatives a tax-advantaged way to

           save money for higher education expenses. Funds in the account            grow tax-free and withdrawals also are tax-free if they are used

           to pay for qualified educational expenses.

 

 

©2008, American Institute of Certified Public Accountants

Child and Education-Related Tax Breaks