Greetings,

Just a reminder that there are some great tips on my website. The tax tip this week will give you the new mileage rates for the last four months of 2005. (Yes, this means you will have to break down your mileage for miles before September 1st and after September 1st). The financial tip of the month contains information about the new bankruptcy law and the business tip of the month deals with customer service.

I will be adding a new feature to my website. Either a Frequently Asked Questions page or a Fraud tip page. I couldn't make up my mind which one to pick, so I decided to leave it up to you. Which one would you like to see? Everyone that responds will get a free gift.

Here's the tax tip:

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Back to school? Don’t overlook the tax breaks.

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If you have back-to-schoolers in your family, review your education planning to optimize the available tax breaks for those school expenses.

Saving for education

* If you need to save for college expenses, you have several tax-advantaged choices. Section 529 plans include prepaid tuition programs and college savings accounts. Prepaid tuition programs let you buy future tuition credits at today’s rates, while college savings accounts let you set aside funds in an investment account. You get no tax deduction, but you can use the money tax-free for college expenses.

* Formerly known as education IRAs, Coverdell education savings accounts are another option. Nondeductible annual contributions of $2,000 can be made not only for qualified college costs, but also for many K-12 expenses. Unlike 529 plans, phase-out rules prevent higher-income taxpayers from contributing.

* Other tax-saving strategies include investing in qualified savings bonds or saving for college via an IRA.

Paying for education

* If you’re currently paying college expenses, your tax planning should take the various available deductions and credits into account. These include the Hope scholarship credit, lifetime learning credit, college expense deduction, and student loan interest deduction.

This quick review is just a reminder that if you have education expenses to pay now or in the future, you need to do some planning to take advantage of the tax breaks. Contact me for the details and assistance that can make paying for your family's education a little less expensive.

Until next time,

Linda