Armed Forces' Tax Guide
Important Changes for 1999
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Earned income credit. The amount you can earn and still qualify for the credit has increased for 1999. The amount you earn must be less than $10,200 with no qualifying children, $26,928 with one qualifying child, and $30,580 with two or more qualifying children. See Earned Income Credit later.
Child tax credit. You may be able to claim a child tax credit of up to $500 for each of your qualifying children under the age of 17. See Child Tax Credit later.
Education benefits. The following benefits are specifically for higher education expenses.
Hope credit. You may be able to claim a tax credit of up to $1,500 for each eligible student.
Lifetime learning credit. For qualified tuition and related expenses paid during the tax year, you may be able to claim a tax credit of up to $1,000 for all students. However, you cannot take both the Hope credit and the Lifetime learning credit for the same student in the same year.
Education IRAs. You may be able to make nondeductible contributions of up to $500 to an education IRA for a designated beneficiary under age 18.
Interest on student loans. You may be able to claim a deduction for interest paid on a qualified student loan. For 1999, the maximum deduction is $1,500.
For more information, see Publication 970, Tax Benefits for Higher Education.
Individual retirement arrangement (IRA) changes. There are various new tax benefits that relate to IRAs. Generally, more taxpayers can benefit from IRAs. If you are covered under an employer retirement plan, the amount of income you can have and still claim a deduction for a contribution to a traditional IRA has increased in most cases. For more information, see Publication 590, Individual Retirement Arrangements (IRAs) (Including Roth IRAs and Education IRAs).
Information courtesy of United States Internal Revenue Service.