Table: Tax Breaks for Schooling

PLAN NEW BENEFITS INCOME LIMITS*

COVERDELL Limits on contributions rise Contributions phase out EDUCATION to $2,000 a year per child; at $190,000-$220,000 SAVINGS ACCOUNT** money can be used at (married); $95,000- elementary and secondary $110,000 (single) schools

EMPLOYER- Up to $5,250 a year can Not more than 5% of the PROVIDED be excluded from income; amounts paid can go to EDUCATIONAL benefit applies to graduate business owners or ASSISTANCE and undergraduate courses their spouses or children

529 COLLEGE Earnings grow free from No restrictions SAVING PLANS federal taxes

HIGHER EDUCATION Deduction of up to $3,000 $130,000 (married); EXPENSES a year in tuition and $65,000 (single) related fees

STUDENT LOANS No time limit on deduction Deduction phases-out at of up to $2,500 in annual $100,000-$130,000 interest payments (married); $50,000- $65,000 (single)

* Adjusted gross income ** Formerly called the Education IRA

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