Most of us will be lucky to save enough in 529 plans to cover the cost of college tuition, let alone room, board and/or any of the other expenses that might qualify. Here is a quick rundown of what expenses qualify with a 529 savings plan: Room and board: This is easy to figure out if your student lives on…
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529 Plans
A reader asked the question, “Can I use funds in my 529 plan to pay for college application fees, tests or test preparation?” Unfortunately the answer is no. Though all of those are both costly and necessary, they are not “qualified education expenses” that are eligible to be paid for by 529 plan funds. In Publication 970, the IRS spells…
Tax time is as good a time as any to discuss education tax credits. The federal tax code provides two primary tax credits, the American Opportunity tax credit (formerly the Hope Scholarship) and the Lifetime Learning Credit. There are slight differences in each, and depending on a family’s circumstances, one or the other may be more beneficial. You can claim…
Are you still filling out the FAFSA? Is that because you have questions about it? One of the most frequently-asked questions about filling out the FAFSA is, “Do I need to include 529 Plan assets as an asset, and is the answer different if the account beneficiary is a child other than the one on whose behalf I’m filling out…
What happens if you don’t use all the money in your 529 plan? This may happen for a variety of reasons: your child received a scholarship, chose a less expensive school than what you had budgeted for, or didn’t attend college after all. Maybe you had other family members contributing to the cost of college. Maybe you just put more…