Education Funding and Taxes Flashcards
Lifetime Learning Credit MAGI phaseouts
Single: $58K - $68K
MFJ/SS: $116k - $136K
AOTC MAGI phaseouts
Single: $80K - $90K
MFJ/SS: $160k - $180K
AOTC Highlights
Benefit: Credits can reduce tax
Annual limit: $2,500/student
Other exp: Computer, internet, course materials
Which ed?: 1st 4 years Undergrad
Other conditions:
- enrolled 1/2 time+
- can be claimed four years
MAGI Phaseouts
- S 80-90
- MFJ 160-180
Lifetime Learning Credit Highlights
Benefit: Credits reduce tax
Annual limit: $2,000/family
Other exp: None
Which ed?: Under and Grad
Other conditions: None
MAGI Phaseouts
S 59-69
MFJ 118-138
Coverdell (CESA) Highlights
Benefit: Earnings not taxed
Annual limit: $2,000 contribution/beneficiary
Other exp: R&B, books, suppl if 1/2time, State Tuition prog
Which ed?: Under and Grad
Other conditions:
Can contrib in same yr as State Tuition Prog
Must withdraw at age 30
MAGI Phaseouts
S 95-110
MFJ 190-220
Trad, Roth IRA, SEP, SIMPLE Edu Highlights
Benefit: No 10% early wd penalty
Annual limit: Qualifying expenses
Other exp: Books, suppl, R&B if 1/2
Which ed?: Under and Grad
Other conditions: None
MAGI Phaseouts: None (exist at time of contrib)
Student Loan Interest Highlights
Benefit: Tax deductible
Annual limit: $2,500
Other exp: Books, suppl, R&B, transport
Which ed?: Under and Grad
Other conditions: At least 1/2 time in degree prog
MAGI Phaseouts:
Single $70,000–$85,000
MFJ $140,000–$170,000
529 Highlights
Benefit: Earnings not taxed
Annual limit: Determ. by sponsor
Other exp: Books, suppl, R&B if 1/2
Which ed?: Under and Grad
Other conditions: Excl. from AGI. AOTC and LLC permitted same year but not for same expenses
MAGI Phaseouts: None
Education Savings Bond Highlights
Benefit: Interest not taxed
Annual limit: Qual. expenses
Other exp: CESA and Qual. Tuit. Prog.
Which ed?: Under and Grad
Other conditions: applies only to EE bonds issued after 1989 or I bonds
MAGI Phaseouts:
Single $82,350–$97,350
MFJ $123,550–$153,550
Employer Education Assistance Prog. Highlights
Benefit: Not taxed
Annual limit: $5,250
Qual. expenses: Books, supplies, equipment
Which ed.? All undergrad and Grad
