529 News

2007 tax inflation adjustments announced

(November 10, 2006) - The IRS has finalized the 2007 inflation adjustments under various tax provisions. Those affecting college savers include the following:

- The standard deduction for a dependent with no earned income remains at $850, and the kiddie tax threshold for unearned income remains at $1,700.

- The income phase-out for the Hope and Lifetime Learning credits is $47,000 to $57,000 ($94,000 to $114,000 for joint filers). The maximum Hope credit remains at $1,650.

- The income phase-out for the education savings bond exclusion is $65,600 to $80,600 ($98,400 to $128,400 for joint filers).

- The gift tax annual exclusion remains at $12,000.

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