Qualified expenses (QHEE’s) are expenses that are eligible for some form of tax benefit such as the AOTC or a tax- and penalty-free distribution from a 529 account. Sounds simple, right? Let the fine print begin! Not all “qualified expenses” qualify for all purposes. And of course the most important rule of claiming education tax benefits: You can’t double-dip. That means that if you use 529 plan funds to pay an expense, you cannot also claim a tax credit for that expense. Continue reading What’s a Qualified Expense?
Category Archives: 529 Plans
How America Saves for College
Sallie Mae’s annual How America Saves for College report shows that almost 2/3 of parents are saving for college, and 1/3 saved more this year than last year. That’s great news. The report also had some other interesting findings: Continue reading How America Saves for College
Feeling Guilty About College Savings?
If your college savings fund is generating negative emotions, you’re in good company: A recent survey by Student Loan Hero found that almost half of parents who are saving for their children’s college feel guilty about not saving enough. The survey also showed some rather worrying data: Continue reading Feeling Guilty About College Savings?
Series EE and I Bonds
Many parents and grandparents purchase education savings bonds– series EE or series I bonds– to pay for college. These bonds are tax-free within some limits, and it’s not uncommon for families to find out too late that they’ve landed outside the limits. Continue reading Series EE and I Bonds
What’s a 1098-T?
If you have a college student, you (or they) probably received a form 1098-T. Schools are required to send this to any student who paid qualified higher education expenses. Here’s what you need to know about your 1098-T: Continue reading What’s a 1098-T?
529s and Private High School Tuition
The recent tax bill that went into effect this year included a change allowing parents to use up to $10,000 annually from a 529 account to pay for private high school expenses. Parents considering taking advantage of this provision should weigh another consideration besides whether or not they have saved enough in their 529 to pay for high school in addition to college: Does your state offer the same benefit? Continue reading 529s and Private High School Tuition
College Savings and Education Outcomes
Did you make a New Year’s resolution to save (or save more) for college? If so, you may be increasing the odds that your student will attend and graduate. Research shows that, across income levels, students who have savings designated for college are more likely to attend and graduate. Overall, the study showed that children who were “expected” to Continue reading College Savings and Education Outcomes
College and the Tax Bill
The final version of the tax bill has some changes to the education-related items that caused a bit of an uproar in previous versions. Here is a quick summary: Continue reading College and the Tax Bill
College Savings Plans in the Tax Bill
Both versions of the tax bill– House and Senate– include changes to education tax benefits. One area of both change and confusion is college savings plans. The bills aim to consolidate some of the education plans: loans, tax credits and tax-preferred savings accounts. Continue reading College Savings Plans in the Tax Bill
What to do with Summer Job Money?
The change in the FAFSA’s timing from winter to fall has some potentially unforeseen consequences. One is student summer jobs. Even at minimum wage, a student who worked full-time for the summer may have earned $3,000 or more. Students who saved their summer income with the intent to spend it over the course of the school year may Continue reading What to do with Summer Job Money?
