WHITMAN BACKS COLLEGE SAVINGS FREE OF TAXESDUNSTAN McNICHOL, Trenton Bureau
40% of this is a refundable credit, meaning you can receive $1,000 even if you owe no taxes. Typically this is used for college students who are dependents on their parents return, or adults over age 24. Students may claim this credit if you are over age 24 as long as you meet ...
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000 per year for a privatecollege,Footnote2parents are looking for ways to save more, says Richard Polimeni, managing director of Education Savings Programs at Bank of America. "The reality of college costs is a major concern for most parents," he explains. "But it's also a great motivator...
Any adult who's a U.S. citizen or legal resident can open a CollegeAmerica 529 savings plan, regardless of income. The earnings in a 529 savings plan are exempt from federal taxes if withdrawals are used for qualified expenses. And some states offer tax benefits as well. ...
In addition to savings, 529 plans also offer significant tax advantages. Contributions to these plans grow tax-free, and withdrawals used for qualified education expenses are tax-free. This means that parents can maximize their savings without worrying about taxes on their earnings or...
Jen Trujillo, who graduated from Colgate University in 2022 and works in tech sales, recalls her high school teaching students about "savings accounts, budgeting, and other financial knowledge. Taxes," she said, "were not covered." Kaitlyn Foster graduated from Pace University in 2022 and current...
Remember, your state may offer tax benefits for 529 plan contributions, and withdrawals aren't subject to federal income taxes when used to pay for qualified higher education expenses.1 There are two types of 529 plans available—college savings programs and prepaid tuition programs.1Prepaid tuition...
The school will withhold income taxes from your paychecks. So, when it’s time to file your taxes in April, you will likely get a tax refund. 8. Pay college expenses tax-free. There are two types of college savings plans that every parent of a future college student should know about:...
Once you have an idea of what college is likely to cost, that can be your savings target. If it’s unrealistic to try to save for the entire amount—and for many people, it is, given all the competing demands on our budgets—you can set your sights on saving for a portion of it....