Dave Harby

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Dave Harby
217-431-8722
Danville, IL
 
Friday, July 25, 2014

Planning For College Costs

First, the bad news: Over the last 20 years, college tuition costs have increased at more than double the rate of inflation. The good news is that several tax-wise planning techniques exist to help you save.

With college tuition skyrocketing, many parents and grandparents are interested in learning more about saving and paying for college. So whether a child is still in diapers or already looking at potential colleges, get out your pencil and take note of these money-saving strategies.

Coverdell Education Savings Accounts

  • This type of account is managed by you on behalf of a designated beneficiary.
  • Earnings are nontaxable and distributions are tax free as long as the funds are used for qualified education expenses.
  • The annual contribution limit is $2,000 per beneficiary.
  • Contributions are phased out at certain income levels. No contributions are allowed if your Modified Adjusted Gross Income exceeds $110,000 ($220,000 for joint filers).

529 Plans

  • With these state-sponsored plans, no income limits apply for participation.
  • Substantial contributions are allowed.
  • Contributions are considered completed gifts to the beneficiary for tax purposes.
  • Normally, gifts ofless than $13,000 to a single individual or $26,000 for married couples in one year arenot subject to federal gift tax. Thus, parents and grandparents who set up 529 plans can reduce their taxable estates and still retain control of disbursements.

Find out more

There are a lot of considerations when choosing how to fund a child’s future education. I’m here to help make that decision easier. No matter where you’re starting from, I’ll give you a tangible plan that will give you the guidance you need to reach this important financial goal. Let’s get together soon to discuss creating your plan.

This article was prepared by COUNTRY Financial.

Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. There are investment risks associated with investing in municipal fund securities. More information about municipal fund securities is available in the issuer's official statement. The official statement should be read carefully before investing.

The information contained here is general and should not be considered legal or tax advice. Laws of a particular state and your particular situation may significantly affect the general information presented herein. The availability of the tax or other benefits mentioned above may be conditioned on meeting certain requirements. You should consult your attorney or tax advisor regarding your specific legal or tax situation.

Securities products and services offered through COUNTRY Capital Management Company, 1705 Towanda Avenue, P.O. Box 2222, Bloomington, IL 61702-2222, (866) 551-0060. Member FINRA External Link / SIPC External Link.