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Tax Credits and Deductions

College Tax Credits and Divorce

Divorced parents are probably already well aware that the financial piece of planning for college is mystifying at best. With tax season upon us, divorced parents planning to claim one of the available college tax credits– American Opportunity Tax Credit or Lifetime Learning Credit– need to know that the credit is only available to the parent who claims the student…

529 Plans and AMT

Many two-income Oregon families end up owing AMT due to our two-legged tax “stool.” That’s because, absent sales tax, we pay higher income and property taxes. For most non-1%-ers who end up owing AMT, state taxes are the biggest add-back item in the AMT calculation.* That means that if you’re paying AMT, a 529 plan contribution can be doubly beneficial. Without…

Obama’s Proposed Changes to 529 Plans

Part of President Obama’s proposal to “simplify the tax code” includes significant changes to the tax treatment of 529 plans and Coverdell ESA accounts: for new contributions (i.e, after enactment of this proposal, should that happen) distributions would no longer be tax-free, even if they are used for qualified education expenses. The proposal doesn’t just remove benefits; it also expands the…

529 Plan Contributions for 2014

It’s too late, right? Not if you live in Oregon. In Oregon (and several other states) you can make a state-tax-deductible contribution to your 529 plan up until you file your 2014 taxes. If you do make a contribution in the first part of 2015, it’s generally best to take the deduction for 2014. Not only do you get the…

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