T he Tax Code treats education kindly. Section 529 college saving plans, for example, have become familiar to parents and grandparents of college-bound youngsters.

Inside 529 accounts, investment earnings aren’t taxed. And there may be no tax on withdrawals if at least the same amount is spent on the beneficiary’s higher education in the same year.

Beyond 529 plans: Tax benefits for education don’t stop there by a long shot. Even when you’re out of school, the IRS may give you a hand paying for ongoing learning.

WRITE-OFFS WHILE YOU WORK

If your employer requires you to take a course and you’re not reimbursed, you can deduct your expenses. (Outlays will not be deductible if the course is taken to meet the minimum education requirements of your employer.)

Option plays: Even if you sign up for a class that’s not required by your employer, unreimbursed outlays may be deductible.

Required: Such a course must help you to stay current or to advance in your present career.

Example: If you’re an executive, the money you pay to take a management or a computer science course at a local college probably will be deductible, because such courses are likely to help in your career.

Trap: A course you take that prepares you for a new career won’t generate deductible expenses. The IRS’s position: If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. See Publication 970, Tax Benefits for Education, at www.irs.gov.

Example: You’re an executive who goes to law school at night. Law school prepares you for a new career -- as a lawyer -- so the money you pay won’t be deductible.

That will be true even if you don’t intend to practice law but are taking the course to learn some legal fine points that will help you do your current job better. What counts to the IRS is whether you could use the course as preparation for a new career.

Allowed: Suppose you are taking a course that improves your current job skills but does not prepare you for a new career. You can deduct the costs of tuition and fees.

When a course is deductible as a career booster, you also can write off outlays for books and supplies. If you travel to the course from your job, you can deduct the corresponding travel expenses.

Current rate: In 2007, the IRS standard rate for business-related auto use is 48.5 cents a mile. That’s the rate you could use for taking your car from work to a job-related course.

What if you pay your way to attend an out-of-town seminar? The costs are deductible if the trip was primarily for education, as long as the classes will help you in your current career.

TROUBLE ON YOUR TAX RETURN

Even though the education-related costs mentioned above are tax deductible, you might have difficulty actually getting any tax savings.

Reason: If you’re an employee, such outlays are considered unreimbursed employee business expenses. Those expenses, in turn, fall into the category of miscellaneous itemized deductions on Schedule A of your tax return.

Hurdle: Miscellaneous deductions are deductible only to the extent that they exceed 2% of your adjusted gross income (AGI).

Example: Your AGI this year is $100,000, and all of your miscellaneous deductions total $3,200.

The first $2,000 of your miscellaneous itemized deductions is not deductible, so you can deduct only $1,200. If your miscellaneous deductions total, say, $1,900, no deduction will be allowed.

Trap: Miscellaneous itemized deductions are not allowed at all when calculating your alternative minimum tax (AMT) obligation. Under the AMT, you won’t be able to write off any education expenses you incur as an employee, no matter how the total compares with your AGI.

SOLE SATISFACTION

There are some strategies that might help you take education-related deductions.

Example: You are an employee and you are not subject to the AMT. To take deductions for qualifying tuition, fees, books, supplies, and travel, try to bunch your education outlays with prepayments of deductible items or delayed payments, where possible.

Bunching such payments into every other year might help you build up sufficient miscellaneous deductions to go over the 2%-of-AGI hurdle every other year. Instead of itemizing education costs, check eligibility for the tuition and fees above-the-line deduction.

Self-employed solution: If you’re self-employed, you can deduct qualified education outlays on Schedule C of your tax return. Even if you’re only incidentally or casually self-employed, those expenses may be deductible if you file a Schedule C to report some self-employment income.

Example: You have a full-time job, but you also earn $10,000 a year as a consultant. You pay $3,000 for a computer course that will enhance your skills when you consult for clients.

That $3,000 can be taken as a deduction on the Schedule C you file to report your consulting income.

Loophole: Taking education deductions on a Schedule C permits tax saving without having to contend with the 2%-of-AGI issue. Big bonus: You can reduce your business income with these deductions even if you are subject to the AMT.

WHEN CREDIT IS DUE

Another possibility for education-related tax relief is to take a Lifetime Learning credit.

Required: You must pay for a post-high school course given at an accredited institution. The course must be either part of a degree program or taken to acquire or improve job skills related to your current career.

Note: The IRS does not further narrow down eligible types of study. See IRS Publication 970, Tax Benefits for Education.

If the education qualifies, you may get a 20% credit on the money you spend for outlays up to $10,000 per year (maximum tax saving of $2,000 each year).

Income limits: For the maximum tax credit in 2007, your AGI (with minor modifications) must be less than $47,000 this year ($94,000 on a joint return). With up to $57,000 in AGI ($114,000 on a joint return), you can get a partial tax credit.

Assessing the AMT. Those otherwise eligible for the Lifetime Learning credit were able to use it in 2006 even if they were subject to the AMT that year, but that tax break has expired. Unless this provision is renewed for subsequent years, you won’t be able to take the credit if you pay AMT.

Note: You can’t use the Lifetime Learning credit to offset expenses you’re claiming as a deduction.