A new 10% tax bracket for 2002. The other tax brackets above 15% have been lowered by 0.5% each.

Contributions to Education IRAs (now called Coverdell Education Savings Accounts) have increased from a mere $500 per year, per beneficiary to $2,000 a year. The income eligibility ceilings have increased for a married couple to $190,000 and phase-out at $220,000. For a single taxpayer the income eligibility ceiling remains at $95,000 and the phase-out is $110,000.

Equally exciting is the fact that effective this year, the term "qualified" education expense has been expanded to include certain elementary and secondary education expenses in addition to college expenses. The term "qualified" education expenses now includes payments to private and religious schools.

Since the contribution limits have increased for 2002 and beyond, the Coverdell Education Savings Accounts now provide a meaningful opportunity to save for education.

Qualified Tuition Plans (known as 529 plans) now offer tax-free payouts for "qualified" education expenses. Note that unlike other tax law provisions, there is no income limit to establishing a 529 Plan. However, there are gift tax implications.

A new deduction on the front page of the tax return for college tuition and fees. The deduction is limited to $3,000 this year. Unfortunately, the income test is rather low: $65,000 for single taxpayers and $130,000 for married couples filing jointly.

The deduction for student loan interest (another page one deduction), is no longer limited to the first 60 months of repayment. The income eligibility limits have been increased for 2002.

The recently enacted (March 2002), Job Creation and Worker Assistance Act of 2002 creates a new front page deduction for elementary and high school teachers who purchase their own supplies. Unfortunately, the deduction is limited to a mere $250 and is only in place for 2002 and 2003.

NOTE: As you can see the subject of support for education has certainly gotten the attention of Congress and the President.

" Traditional and ROTH IRA contribution limits have been increased from $2,000 in 2001 to $3,000 this year and even higher ($3,500) for taxpayers who are at least 50 years of age at year-end. If a taxpayer turns 50 on December 31, 2002, he or she is eligible to contribute the additional $500.

Elective deferral limits for 401(k), 403(b), etc. plans are up this year to $11,000 and $12,000, if you are at least age 50 by year-end. The deferral limit for SIMPLE plans is $7,000 (or $7,500 if you are at least age 50 by year-end.)

Adoption expenses may be eligible for an enhanced tax credit or income exclusion (where the employer pays) of up to $10,000 per adoption.