Children as Dependents, Kiddie Tax, and College Tax Planning Strategies – Updated

A number of years ago, we authored this article explaining why higher income parents may be well served to gift appreciated investments to their children and then have the children use the proceeds to pay for college. The article further explained how taxpayers who faced alternative minimum tax (AMT) received no tax benefit from [...]

High Income Earners Fail to Appreciate the Math of 529 Plans – Part II

We made the case in this earlier post that Section 529 College Savings Plans present a huge tax saving opportunity for high income parents but that most fail to exploit the opportunity.  Based on experience and observation, we cited five reasons that parents and grandparents fail to maximize the potential benefits.  Two of those reasons [...]

Should I Use a 529 College Savings Plan to Pay for Private K-12 Expenses?

When qualified state tuition programs (QSTPs) were first introduced in 1996 and Section 529 was added to the Internal Revenue Code, the intent of Congress was to create a create a tax-friendly way for families to save for college costs.  At that time, the law provided that any earnings in a QSTP would be tax [...]

Why Education Financial Planning Is Essential

High-income parents are often astute about funding their retirements, but they’re not always as smart about saving for their kids’ college educations. Not saving enough — or saving the wrong way — can cost you tens or even hundreds of thousands of dollars. The certified financial planners at Resource Planning Group of Atlanta, Georgia, explain. [...]

Why I Bonds May Be the Most Underappreciated Savings Vehicle

Related posts on Investing in an Inflationary Environment: Deeper Dive into the Mechanics of Series I Bonds What are TIPS and how do they work? Sell Bonds in Inflationary Environments? Your end of year to-do list is already overflowing.  You have to prepare and send holiday cards, put up lights, get the holiday-themed lawn ornaments [...]

Impending Tax Law Changes That May Impact You

The House of Representatives passed a bill on May 23rd known as the SECURE Act (Setting Every Community Up for Retirement Enhancement Act of 2019) which would initiate the biggest changes to retirement accounts in over a decade. The bill had bipartisan support, passing with a vote of 417-3. It now heads to the Senate [...]

3 Things People Get Wrong About Gifts To Or From Family Members

On June 26, 1963, President John F. Kennedy delivered one of the most important speeches of his presidency at the foot of the recently-built Berlin Wall.  During this speech, viewed as a turning point in the Cold War, Kennedy spoke the now famous words, "Ich bin ein Berliner."  His intent was to express solidarity with [...]

Tax Planning Strategies Under the New Tax Law

The first sentence of our early November 2017 Astute Angle post read "It is November 8th, 2017 as this is written and there is no doubt that a lot will happen with the Tax Cuts and Jobs Act before the end of the year."  As expected, a lot did happen to the initial Tax Cuts [...]

More Smart Tax Planning with 529 College Savings Plans

In a prior article about saving for college, we outlined some of the many ways to handle overfunded 529 college savings plans and why these underpublicized options justify aggressive funding of 529 plans.  In the opening paragraphs of that article, we explained how the rules treat 529 account funds used for non-qualified expenses: The first [...]

Is Overfunding 529s Really so Terrible?

Since Section 529 was added to the Internal Revenue Code under the Small Business Job Protection Act of 1996, many families have discovered the significant advantages of the “Qualified Tuition Programs” which we collectively now refer to as 529 College Savings Plans. Among other benefits, these plans offer tax-exempt investment growth for any funds eventually [...]

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