With the sky-high cost of a college education, every dollar saved through tax breaks is money in the bank. But first you have to learn what tax options are available and which ones are right for you.
The sooner you start thinking about saving for college, the better off you’ll be. Thanks to Section 529 Plans, or qualified tuition plans, families can either prepay college tuition rates for schools that qualify or set money aside in a tax-free account to be used later for educational purposes. To help you make the most of your college tax planning, it’s best to sit down with a tax professional who’s up to date on the latest rules and can advise you accordingly.
State-run tuition programs are a popular way to finance higher education, allowing for substantial contributions to a designated beneficiary while still avoiding gift taxes. In Florida, prepaid tuition plans are especially worth looking into, since unlike 529 saving plans, they are guaranteed by the state and can be used to lock in a lower rate for attending a public college or university in the future.
For well-off grandparents, section 529 plans are not only good for supporting a child’s education, they’re also great for estate tax planning. Large contributions to such a plan allow for a swift reduction of a taxable estate while still retaining control over the bestowed assets.
As you can see, knowing what tax opportunities are available can really pay off when it comes to financing a college degree for yourself or your child or grandchild. Fortunately, Price Advantage Accounting is here to instruct you in all aspects of tax planning for college. Let us help you get the education tax benefits you deserve in Orlando and beyond.