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Education Tax Break	Details	Maximum Amount	Begins to phase out when 2007 modified adjusted gross income reaches:
Hope Credit	Applies to tuition and certain required expenses during the first two years of post-secondary education at eligible institutions. The student must be enrolled at least half-time for at lease one academic period during the year. May be claimed for more than one student per year.*	Up to $1,650 per year for the first two years (100% of the first $1,100, plus 50% of the next $1,100)	$47,000 for unmarried taxpayers. $94,000 for married couples filing jointly. Phase-out is complete at $57,000 and $114,000 respectively.
Lifetime Learning Credit	Applies to tuition and fees for post-secondary education and can be used for an unlimited number of years. It applies to undergraduate, graduate and professional degree courses, including instruction to acquire or improve job skills, regardless of the number of years in the program.	Up to $2,000 per year (up to 20% of first $10,000)	$47,000 for unmarried taxpayers. $94,000.for married couples filing jointly. Phase-out is complete at $57,000 and $114,000 respectively.
"Above-the-Line" Higher Education Tuition and Fees Deduction	Applies to tuition and certain required fees at an eligible higher education institution. It is taken as an adjustment to income, and therefore, may be claimed even by taxpayers who do not itemize. Currently, this deduction is set to expire after 2007. You cannot take the deduction if you or anyone else claims a Hope or Lifetime Learning Credit in 2007 for the student's qualified expenses.	Up to $4,000 per year	$65,000 for unmarried taxpayers. $130,000 for married couples filing jointly. Phase-out is complete at $80,000 and $160,000 respectively.

*Note: You cannot take both the Hope Credit and the Lifetime Learning Credit for the same student in the same year.

#2 - If you are not currently paying education expenses, there is still time to prepare. With cost projections for four years of college exceeding six figures, you should be considering how to save for this important goal.

I recommend that parents start an investment savings program now. Save for your children's education today � or you will saddle yourself and your children with huge debt tomorrow.

529 Plans were specifically set up to help parents start saving early and often. It is an easy, affordable and convenient way for families to save for college. While the federal tax advantages are one of the primary benefits, states also offer a variety of features and benefits to help families reach their college savings goals. Here are some of the benefits:

� All withdrawals used for qualified higher education expenses are exempt from federal income tax.

� Many states also exempt withdrawals from state income-tax for qualified higher education expenses.

� The account holder keeps control of the assets within the program regardless of the beneficiary's age.

� Most plans have very low minimum monthly contribution limits making them attractive to families regardless of income level. Some states have minimum limits as low as $15.

� The beneficiary can be changed at any time to another member of the beneficiary's family.

� Money can be used to pay for tuition, fees, room, board, books, supplies and required equipment.

� Contributions can be made conveniently through payroll deduction or automatic transfers from a bank account.

� Account owners can make a lump sum contribution of up to $60,000 per beneficiary or $120,000 if married filing jointly and avoid incurring a taxable gift on this amount by electing to use five years of the annual gift tax exclusion all in one year. After utilizing this provision, the annual exclusion cannot be used again for the same beneficiary until the five year period has passed. Should a donor die within those five years, a pro-rata amount of the gift will revert back to their estate and be treated as a taxable gift.