|
|
|
Avoiding College Credit Card Traps
Congratulations college freshman! You’re about to embark on one of the most exciting times of your life. By now your parents, siblings, and friends have offered you all kinds of advice on how to make your transition to college smoother - how to get...
College Savings Plans
College Savings Plans So you have just carried your newborn into the house for the first time, placed him or her down into the freshly-purchased crib that you just obtained, and watched him or her drift into their first sleep under your roof. Now...
College Savings Plans – are they the best choice for my child?
College Savings Plans – are they the best choice for my child? College Savings Plans, also called Section 529 plans, are one of the best ways to save for college because they offer: -Tax advantages -A variety of investment options -Flexible...
How To Find The Best College Credit Cards
College freshmen are bombarded with offers for college credit cards. They get all sorts of junk mail and e-mails saying enticing things like, "pre-approved for college credit cards." Few students can resist these college credit cards marketing...
Writing Help for College Students
Your literature professor has asked you to write a 7-page essay comparing Medieval and Renaissance poetry; your economics professor wants 15 pages on how globalization is affecting the economy in three different countries; and your mathematics...
|
|
| |
|
|
|
|
|
|
More Ways To Use The Taxation System To Pay College Education Costs
In addition to Education IRAs and federal tax credits there are many other ways to use the taxation system to pay for the high and increasing costs of a college education. You need to consider all of these tax benefits in order to ensure that you can benefit from this form of government support to families who are helping their kids get a higher education.
Some of the other ways to let the taxation system pay for some of your family's college education expenses include deductible expenses, Section 529 plans, regular IRA's, savings bonds, investing on your child's behalf, and putting your child to work for you.
You can deduct up to $4,000 a year in qualified educational expenses but you can't combine a deduction and a tax credit for the same student in the same year. You can however split the deduction and the credit if you have more than one child who qualifies.
Many people also contribute money to Section 529 plans which are named after the section of the IRS code that regulates these plans You can also put money into so-called Section 529 plans. Section 529 plans are regulated by the states that hire an asset management company to look after the business side. You can contribute to these plans for future college education and the earnings added to the funds are tax-free.
You can now also use your regular IRA penalty-free if you want to use some of it pay for qualified educational expenses. You can
deduct up to $2,500 in interest paid for educational loans as an above-the-line deduction. Like many other deductions these benefits are not available to single, or dual high-income earners.
But perhaps the easiest way to get taxation monies working for your child's college education is through a special U.S. Savings Bond exclusion. You can exclude a portion of the interest that accrues on such bonds if you meet certain qualifiers. Those qualifiers include having paid education expenses in the year of redemption; are not married and filing separately, and if you meet the general base income restrictions.
Still another way to beat the taxman and save money on college education is to make investments in your child's name. Children under 14 face a much lower tax rate and even as their income grows it will likely be at a lower rate than yours. Just make sure that the investment is in your child's name and stay on their good side because ultimately that money is theirs.
The final way to meet your college education needs that works for some people is to hire your kids if you are self-employed. There are some restrictions but once again any monies you give your children should be plowed back into their own or the family college education fund.
About the Author
This article provided courtesy of http://www.degrees-online.net
|
|
|
|
|
|