Category Archives: College Savings

Ask Linda: What should I do with this unexpected bonus?

Dear Linda, I will be receiving an unexpected bonus shortly. I want to make sure I am smart with the money and have a plan in place for what I am going to do with it. Any ideas? Sincerely, Lucky Lady Dear Lucky Lady, Your question is a common one we receive around this time of year as companies complete their prior-year reporting and issue bonuses. You are wise to create a strategy before spending the bonus. Without knowing theRead More

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529 Plan Rules Have Changed

They are still the best tool in your toolbox for college planning, but there have been some changes. Here is a quick re-cap. What are 529 plans? They are investment vehicles that are named after the Internal Revenue Code that created them. They have helped many of our clients pay for college for their children as they offer tax advantages when used for qualified education expenses at eligible educational institutions. What tax advantages do they offer? When used appropriately, theRead More

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If you paid for higher education costs in 2013, be sure to speak with your tax preparer to see if you may benefit from this credit. What is it? The American Opportunity Tax Credit (AOTC) modifies the Hope Tax Credit. It allows you to take a tax credit for qualified higher education costs including tuition, certain fees and course materials. See IRS Publication 970 for a complete list. It does not include room & board. How much is it? TheRead More

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When grandparents want to help pay for a grandchild’s education, they can choose a method that is just as beneficial to them as it is to their grandchild. With smart planning, grandparents can save taxes using a tax-preferred vehicle like a 529 plan. If they choose a 529 plan, it is important to understand the implications of having grandparents as owners instead of the child’s parents. Tax-deferred 529 plans have an account owner and a beneficiary. Typically, a parent isRead More

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With this next post, I wanted to share an issue I have seen a couple times within the last few months. Parents have called asking how to postpone their child from receiving a UTMA account at age 18. The answer is, you cannot postpone the inevitable. Minor children cannot legally hold mutual funds, stocks, bonds and life insurance policies. If parents want to transfer these to their children, they have the option to set up a UTMA (or UGMA) accountRead More

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