Posted: Apr 28, 2005 By: BERNARD A. FAGNANI CPA

Subject: HOPE AND LIFETIME LEARNING CREDIT

Comment: I FIND IT INCONSISTENT AND ILLOGICAL THAT A SINGLE PARENT BEGINS TO LOSE THE HOPE OR LIFETIME LEARNING CREDIT ONCE HIS/HER AGI EXCEEDS $42,000. YET, A MARRIED COUPLE CAN EARN TWICE THAT AMOUNT, $85,000 BEFORE THE CREDIT IS PHASED OUT.

REVIEW THE FOLLOWING SCENARIO, SINGLE MOM, JANET HAS TWO (2) COLLEGE CHILDREN IN HER HOUSE. JANET, EARNS FROM HER TWO JOBS $66,000. BECAUSE, SHE TRIES TO MAINTAIN A QUALITY OF LIFE FOR HERSELF AND HER CHILDREN, SHE DOES NOT GET THE CREDIT.

MEANWHILE, OVER AT THE JONES, MR. AND MRS. JONES HAVE TWO(2) CHILDREN IN COLLEGE AND TOGETHER THEY MAKE $84,000; $18,000 MORE THAN JANET. AND THE JONES GET THE HOPE CREDIT $2,000.

PLEASE TELL ME WHERE THE LOGIC IS IN THIS LAW?

JANET MAINTAINS A HOME FOR 3 PEOPLE; JONES MAINTAINS ONE FO 4 PEOPLE. WHY ARE THEY ALLOWED TWICE THE CEILING AS JANET?

I HAVE ENCOUNTERED THIS PORBLEM FROM DAY ONE WHEN THE HOPE CREDIT BECAME LAW. AND IT SIMPLY DOES NOT APPEAR FAIR TO THE SINGLE PARENT.

THERE SHOULD BE A BETTER PARITY AND I HOPE THAT THE TAX REFORM PANEL REVIEW THIS INEQUITY.

RESPECTFULLY YOURS,

BERNARD A. FAGNANI CPA