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The "Hope Scholarship" Tax Credit: The Hope tax credit allows taxpayers to claim a credit of up to $1500 for each of a student's first two years of college.
This $1500 credit is available to individual taxpayers who have an Adjusted Gross Income of less than $41,000 and to joint filers with an Adjusted Gross Income of less than $82,000.
The Lifetime Learning Credit: This tax credit allows families to claim a credit of $10,000 in tuition expenses. A maximum credit of $2000 can be claimed in any one year.
Coverdell Education Savings Account (ESA): Taxpayers can put $2000 per year for each student under the age of 18 into an Education Savings Account.
Qualified Tuition Programs (529 Plans): These plans are growing rapidly in their popularity. A prepaid tuition plan makes it possible for families to "lock in" college tuition at current rates. Contact a tax professional or go to www.irs.gov for more information on these incentives.
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