2009 Back-To-School Highlights Dear Valued Clients and Business Associates: Many of you have just sent your son or daughter to college and you may be wondering if any of the money you just spent is tax deductible? Thanks to some recent changes in the IRS Back-to-School Breaks some of it may be tax deductible. I’ve listed some of the highlights below. If one or more of these interests you, or prompts you to question something else please feel free to contact us. We want to be there for you to make tax time beneficial for you. Sincerely, Tricia Nicholson Delisi & Associates 217 S. Pennsylvania Ave Greensburg, PA 15601 Call 724-832-8585, e-mail contact@delisiassociates.com, or go to www.delisiassociates.com , click on “our staff”, and locate the e-mail address of the staff member you work with individually. 529 PLAN HIGHLIGHTS       Contributions to an IRC section 529 plan are deductible on your 2009 Pennsylvania tax return. A maximum of $13,000 per beneficiary, per taxpayer may be deducted.       529 plan distributions are tax-free as long as they are used to pay qualified higher expenses for a beneficiary.       Before 2009 qualified higher expenses included tuition, required fees, books, supplies, room and board, equipment and special needs services for at least a half-time student. Beginning in 2009 and through 2010 computer technology and equipment are added as qualified higher expenses. Also Internet access and related services to be used by the student while they are enrolled at an eligible institution are qualified higher expenses.   AMERICAN OPPORTUNITY CREDIT         The American Opportunity Credit has been designed to modify the existing Hope Credit during the 2009 and 2010 tax years.       Tuition, related fees, books and other required course materials are included with the American Opportunity Credit.       The credit equals 100% of the first $2,000 spent and 25% of the second $2,000 spent. 40% of the credit is refundable; therefore, even people that don’t owe tax can get an annual payment of the credit up to $1,000 for each eligible student.        The full credit is available to taxpayers whose modified adjusted gross income is $80,000 or less ($160,000 or less for married filing joint taxpayers). The credit phases out for modified adjusted gross incomes above these amounts.        The credit is available for the first four years of post-secondary education.   Please note: 529 plan distributions and the American Opportunity Credit or Lifetime Learning Credit must be coordinated and cannot be used on the same expenses.