As more of people’s basic needs turn into luxuries, American children may find themselves on the losing end of education. Nevertheless, anyone can gain a head start in financing their children’s education, with a few tax-friendly tips from the Tax Lady herself, Roni Lynn Deutch.

For young children’s parents, who want to retrieve education funds sans the taxes, a Coverdell Education Savings Account (ESA) is in order. The contribution, set at $2,000 yearly until the beneficiary turns 18, is not tax-deductible, but the funds for withdrawal are, according to Roni Lynn Deutch.

If the student is over 18, he or she is still eligible for numerous deductions and tax advantages. They include credits for lifetime learning as well as deductions for college tuition and classroom expenses. One of the newer consumer-friendly schemes, the American Opportunity Tax Credit, has been tweaked and extended under President Barack Obama for students.

Yet there are still many tax-friendly educational savings plans designed for middle-class and low-income demographics in the US. Parents have probably heard of The 529 College Savings Plan, one of the most common ways to cover children’s education in America.

This College Savings Plan is the more popular program, which allows parents a choice of different investment plans. Parents can spend the returns on their investments on tuition, books and so forth. Provisions vary from state to state however. The other type of 529 program is the “Early Bird Special” or Prepaid Tuition Plan. It lets parents pay for tuition in advance and according to current prices, much like rent control.

Otherwise, parents may want to take advantage of Savings Bonds for Education. These special bonds also make contributions tax-deductible when they are withdrawn in the future. However, since these are bonds, parents can retrieve the funds during financial emergencies. The bonds work best when the investments are made early. Parents need to pass certain income requirements though.

Roni Lynn Deutch thinks these tips could spell a mountain of difference in a mercurial economy. However, the Internal Revenue Service (IRS) may honor only one big educational plan on a tax return.

Roni Lynn Deutch is one of the leading tax lawyers in the US. Her tax firm is dedicated to relieving taxpayers from their federal liabilities with the IRS.