<p>This is slightly off topic but I thought that this group might be interested in a new tax credit that is part of the stimulus bill as agreed upon by both houses of Congress. The following is an excerpt of a summary jointed issued today by the Senate Finance Committee and the House Ways & Means Committee:</p>
<p>American Opportunity Education Tax Credit. The bill would provide financial assistance for individuals seeking a college education. For 2009 and 2010, the bill would provide taxpayers with a new American Opportunity tax credit of up to $2,500 of the cost of tuition and related expenses paid during the taxable year. Under this new tax credit, taxpayers will receive a tax credit based on one hundred percent (100%) of the first $2,000 of tuition and related expenses (including books) paid during the taxable year and twenty-five percent (25%) of the next $2,000 of tuition and related expenses paid during the taxable year. Forty percent (40%) of the credit would be refundable. This tax credit will be subject to a phase-out for taxpayers with adjusted gross income in excess of $80,000 ($160,000 for married couples filing jointly).</p>
<p>The new provision modifies the Hope Credit for 2009 and 2010. The credit is now available for 4 years instead of 2 years and now maxes out at 2,500, consisting of 100% of the first $2,000 of expenses and 25% of the next $2,000. The types of expenses that qualify now include course materials in addition to tuition and fees. (This could be a help to music students, in particular.)</p>
<p>We had already used the two year provision for the Hope credit and had moved into the Lifetime Learning credit on this years return. I now wonder do we go back to the Hope credit for next year? My husband did our taxes himself this year, since it had pretty much been the same for the last couple of years. I thought yay! we can save that prep fee, it looks like it's back to H & R next year!</p>