SAVING MONEY FOR KIDS EDUCATION
For many parents, savings for their kids education is a big concern. Many opt to put them in a tax-deferred savings vehicle like the 529 plan.
Not only is this a good way to save for children’s education related expenses like tuition, lodging, groceries, books, etc but there are some other loophole available too.
* You can change the beneficiary at any point to favor someone who goes to a more expensive school.
* You can use the money for your own education.
* You can give upto $60,000 to a single beneficiary in one go, although you can’t give that same beneficiary any more contributions for 5 years.(since the maximum gift amount is $12,000 per year)
* You can use it as an estate planning tool by moving money out of your estate (but not necessarily out of your control). If grandpa & grandma each gift $50,000 to each of their 5 grandkids, thats $500,000 out of the estate in one fell swoop! Of course, they better not die too quickly, else some of it may be taxable!
* Being able to change the beneficiary may also allows you to skip paying estate tax for several generations!
It might be complicated to understand and setup, but I think its definitely worth checking into.
If you found this post helpful, consider donating to my coffee fund!![[del.icio.us]](http://images.del.icio.us/static/img/delicious.small.gif){kind=small}
- Housing Update Interesting update on some markets from the Real Estate Journal. Utah homes worth their salt Utah apparently has missed the news about the end of the housing boom, with median selling prices on the way up. For example, Utah County's Alpine area saw median selling prices rise 57.2% to $529,000......
- Why Use Seller Financing? Here's an example of a buyer using seller financing to purchase a property. The buyer, a real estate investor, bought a cabin in a sparsely populated place. Recognizing that the seller didn't really have many potential buyers, he negotiated a seller carry-back. Basically the seller is carrying back the mortgage.......
- Escaping The Rat Race Here's another inspiring story on getting out of the rat race.How I escaped the rat raceCarole Dobson as told to Duncan HoodFrom the May 2006 issue of MoneySense magazineI used to work full time at a stressful job making a six-figure salary. Then, about 10 years ago, I started planning......
Related Websites
- Can You Cut Expenses by a Half Million Dollars? This post was written by Marie. With the advent of the Great Recession, today's populations are re-learning frugality and expense reduction. Through the harsh reality of real scarcity in our own personal financial situation, we learned those lessons over 40 years ago. We were so poor that we re-used......
- Credits, Deductions, Oh My! Summary of Recent Income Tax Changes I was doing research on the recent changes in income taxes for one of the planners at my office, and I came across one of the coolest sites summarizing the changes (that is if you can describe any kind of tax stuff as "cool").  I am only going to highlight those......
- Personal Retirement Plan Investment Options Good financial management consists of two different distinct facets, the first of which is learning how to make the best use out of your limited earned income in order to best meet your current expenses, and the second of which has to do with learning how to implement strategies that......
[All content is copyright of Living Off Dividends & Passive Income]
February 27th, 2007 at 10:54 am
http://www.bankrate.com/brm/news/college/Oct06_529_plan_a1.asp?caret=31
Here is a nice link from bankrate which discusses some of the loopholes. IMO, these loopholes will all get shutdown if/when they decide to allow the tax free status to continue.