Saturday, June 26, 2010
Friday, June 25, 2010
Thursday, June 24, 2010
- How much experience does the advisor have with 529 plans?
- What are the main benefits and drawbacks of the plan the advisor is recommending?
- Is the advisor also selling the plan to you and, if so, is it the only plan the advisor has available to sell?
- What commission will the advisor make for selling you this plan?
- What are the tax ramifications of purchasing a particular plan over the plan sponsored by the state in which you reside?
- Does the plan have an option for self-guided investment choices?
- When are you allowed to re-allocate your investments or change your strategy?
Wednesday, June 23, 2010
I'm considering a state pre-paid tuition plan for my child, what are the pros and cons? 529 College Savings Answers
- Guaranteed to meet increased costs of state education
- Flexibility as to contract or unit plans
- Excellent for use at state universities
- Transferrable to use at private schools, but…
- Lack of flexibility
- Low return on investment
- Narrow definition of covered expenses
- High penalties for withdrawal
- May not get full value if transferred for use at private school
Tuesday, June 22, 2010
Monday, June 21, 2010
Sunday, June 20, 2010
If you open a 529, can you continue to make withdrawals after the child is no longer your dependent? 529 College Savings Answers
Saturday, June 19, 2010
Friday, June 18, 2010
Will 529s continue to be a smart investment during the Obama administration? 529 College Savings Answers
Thursday, June 17, 2010
- Spouse of the beneficiary
- Son, daughter, stepchild, foster child, adopted child, or a descendant of the beneficiary or the beneficiary’s spouse
- Brother, sister, stepbrother, or stepsister
- Father or mother or ancestor of either beneficiary or spouse
- Stepfather or stepmother
- Son or daughter of a brother or sister
- Brother or sister of father or mother
- Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law
- The spouse of any individual listed above
- First cousin
Wednesday, June 16, 2010
I want to transfer my UGMA/UTMA into a 529, but I'm worried about losing money, what should I do? 529 College Savings Answers
Tuesday, June 15, 2010
ha What is the current Hope Scholarship Tax credit for college students?
Looking for some good news about owing taxes? The Hope Scholarship Tax Credit is reserved exclusively for certain taxpayers who find themselves with a balance due come April 15. For families with one or more child attending college, the Hope Scholarship Tax Credit (See IRS Form 8863) offers some welcome relief. Here’s how it works:
First, the government looks at your Adjusted Gross Income (AGI). The AGI must fall at or below the limits to qualify for the credit. In 2008 that limit is $58,000 for single filers and $116,000 for joint filers. (If the AGI falls between $48,000 - $58,000 for a single filer or $96,000-$116,000 for joint filers, the amount of tax credit available under this program will be reduced.) (In 2009 the credit is phased out for those on the higher end of these brackets $65,000 -- $80,000 as a single filer or $130,000 -- $160,000 for married filing jointly filers.) Next, the credit is calculated by taking 100% of the first $1,200 in eligible expenses and 50 % of the next $1,200 in eligible expenses. For many families this results in an $1,800 tax credit, the limit allowed per eligible student. If a family has two students attending college during the tax year, this credit is multiplied by two and so on. The credit is only good for the first two years for each eligible student. For 2009, the Hope Credit has been renamed the American Opportunity Tax Credit as part of the American Recovery and Reinvestment Act of 2009. The credit amount increases to a maximum of $2,500 per year and is available for four years instead of two.
One of the best aspects of the Hope Scholarship Tax Credit is the nature of tax credits. Rather than merely deducting these expenses from your income, a tax credit is deducted directly from the amount of taxes owed, dollar for dollar. In the tax world, you can’t do better than that!
Share your thoughts: Is your family using the Hope? Should the government expand this program? Let us know what you think!