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Higher education figures at-a-glance

  2009 2010
Coverdell education savings accounts (formerly known as education IRAs)    
Annual contribution limit $2,000 $2,000
MAGI phaseout range for Coverdell education savings accounts:    
Single--phaseout threshold amount $95,000 $95,000
Single--completed phaseout amount after $110,000 $110,000
Married filing jointly--phaseout threshold amount $190,000 $190,000
Married filing jointly--completed phaseout threshold amount $220,000 $220,000
Deduction for qualified higher education expenses    
Maximum deduction $4,000 N/A
MAGI maximum for full $4,000 deduction:    
Single $65,000 N/A
Married filing jointly $130,000 N/A
Reduced deduction available $2,000 N/A
MAGI range for $2,000 deduction:    
Single--MAGI greater than this amount $65,000 N/A
Single--MAGI does not exceed this amount $80,000 N/A
Married filing jointly--MAGI greater than this amount $130,000 N/A
Married filing jointly--MAGI does not exceed this amount $160,000 N/A
Education loans--interest deduction    
Maximum deduction for interest paid on qualified education loans $2,500 $2,500
MAGI phaseout range:    
Single--phaseout threshold amount $60,000 $60,000
Single--completed phaseout amount after $75,000 $75,000
Married filing jointly--phaseout threshold amount $120,000 $120,000
Married filing jointly--completed phaseout threshold amount $150,000 $150,000
Gift tax exclusion    
Annual gift tax exclusion--single individual $13,000 $13,000
Annual gift tax exclusion--joint gift $26,000 $26,000
Lump-sum gift to 529 plan--single individual $65,000 $65,000
Lump-sum gift to 529 plan--joint gift $130,000 $130,000
Hope1 and Lifetime Learning Credits    
Maximum Lifetime Learning credit $2,000 $2,000
Maximum Lifetime Learning credit--Midwestern disaster area $4,000 N/A
Maximum Hope credit $2,500 $2,500
Maximum Hope credit--Midwestern disaster area $3,600 N/A
MAGI phaseout range for Lifetime Learning Credit:    
Single--phaseout threshold amount $50,000 $50,000
Single--completed phaseout amount after $60,000 $60,000
Married filing jointly--phaseout threshold amount $100,000 $100,000
Married filing jointly--completed phaseout threshold amount $120,000 $120,000
MAGI phaseout range for Hope Credit    
Single--phaseout threshold amount $80,000 $80,000
Single--completed phaseout amount after $90,000 $90,000
Married filing jointly--phaseout threshold amount $160,000 $160,000
Married filing jointly--completed phaseout threshold amount $180,000 $180,000
Kiddie tax    
Generally, children2 pay federal income tax at their parents' rate on any investment income over ... $1,900 $1,900
U.S. savings bonds--interest exclusion for higher education expenses    
Joint returns:    
Phaseout threshold for joint returns $104,900 $105,100
Completed phaseout amount after $134,900 $135,100
Other returns:    
Phaseout threshold for other returns $69,950 $70,100
Completed phaseout amount after $84,950 $85,100

1 For 2009 and 2010, the American Recovery and Reinvestment Act of 2009 modifies the Hope credit and renames it the American Opportunity tax credit.

2 For tax years beginning after May 25, 2007, the kiddie tax rules apply to children under age 19 and full-time students over age 18 but under age 24 unless an exception applies.