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Tax Credits and Deductions

Claiming the AOTC

The American Opportunity Tax Credit is usually the best tax benefit available to families. But it has some rules you should be aware of in order to make the most of it. The AOTC is worth up to $2,500 per year, per student, for four years. To claim it, the family must spend $4,000 on qualified expenses from a non-529…

FAFSA: Is it Income?

The FAFSA asks about income numerous ways: it collects your tax return data through the IRS Data Retrieval Tool and then poses a number of additional questions about income. So let’s look at those. First, the IRS DRT pulls your 2019 tax data including adjusted gross income and actual taxes paid. However, that leaves some items out and the FAFSA…

College Planning After a Divorce

Students whose parents are divorced have some planning opportunities if the exes are willing to cooperate. The first step is of course to understand the planning areas. And the first step of that first step is to understand a key definition: “custodial parent.” Custodial parent is used in two primary places for college purposes, and in ways that are completely…

Ask the Experts: 529s

ICYMI, here is my conversation with Richard Ellis of my529. Some key takeaways: When looking for the “best” 529, start by checking if your state offers a tax benefit for contributions to its plan. If not, look for a plan that offers low-cost, diversified portfolios and low plan fees. Research has shown that students whose families have any amount of…

What to do Right Now

I keep hearing variations on the theme of, “When things are uncertain, it’s helpful to have specific tasks to do.” So here is a to do list for you, sorted by your student’s age. Current College Student Check your course schedule to confirm if your in-person and online courses align such that you can get to both. Make sure you…

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