This time of year I talk to many people who are scrambling to come up with tax deductions before the end of the year. Maxing out your deductible 529 plan contributions each year is a good idea and should have a place in that strategy. But before you rush to write a check by Dec. 31, check your state’s contribution…
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Tax Credits and Deductions
Most of us don’t have the full four years of college expenses socked away in a 529 plan when our student starts college. That means that most of us use a combination of savings, out-of-pocket spending, and borrowing to pay for college. It’s logical to assume
This week, President Obama signed an executive order that will dramatically simplify the financial aid process for many families. Beginning next October, for the 2017-2018 school year, families will be able to file the FAFSA using two years’ prior (“prior-prior year”) data. That means that
It is often more advantageous for parents to own the 529 plans for their students, rather than other family members. (Remember, the parents’ assets are assessed at 5.64% above the asset protection allowance, meaning a $10,000 529 plan balance would increase EFC for the FAFSA by a maximum of $564.
My last post highlighted some of the tax benefits of 529 plans. One of the lesser-known benefits is that 529 plans get preferential treatment on the FAFSA. How? A couple of ways.