An eligible student includes yourself, your spouse, or a dependent child. The Hope Scholarship Credit is available for expenses incurred on or after January 1998, for the first two years of post-high school education that begins in 1998. The Lifetime Learning Credit allows you to take a credit for qualified expenses you pay for under-graduate and graduate level courses and education you take to acquire or improve job skills. Credits produce greater tax savings in that they reduce your tax liability dollar for dollar, where a deduction provides only a partial tax benefit. Manipulating sales of capital assets and preplanning their disposition can also save tax dollars.
Capital gains offset capital losses dollar for dollar.
You may want to consider selling stocks or securities that have a poor performance record in the same year that you are showing a large capital gain. This strategy will allow you to keep the profit in your hands and pay little or no tax on the transaction. Maximizing contributions to retirement plans is another way to minimize tax dollars. New rules enacted in 1997 allow certain taxpayers to contribute to an IRA that may have been unable to in past years. The object is to plan ahead and seek the advice of a professional who is familiar with your tax situation.