Help Paying for College in 2009, 2010
There are many options to help you ease the pain of paying for college.
Section 529
A Section 529 plan can help you prepare for the expense of paying for your child’s college tuition. The standard 529 plan allows you to prepay for college at the current rate for future use. This plan also allows the plan to be free from federal income tax. These plans are increasing in use as the price of college continues to increase annually. If this money is withdrawn for any other purpose than to pay for higher education, the funds will be taxed again.
Coverdell Education Savings Account
This is a type of savings account that will allow you to deposit up to $2,000.00 annually to save for college. Using this type of savings account will allow you to deposit this money and let it grow at a tax free rate. This plan also offers a tax penalty for withdraws for any other reason than higher education expenses.
College Tuition Tax Breaks
There are new tax breaks that allow you to deduct up to $4,000.00 of your college education expenses.
Qualified expenses include:
- Tution
- Books
- Course-related supplies
With the rising cost of college tuition, now is an important time to start saving for the future but if you are already paying for college and did not plan ahead then take full advantage of all the available deductions. These tax deductions are fairly simple to take and can put money back in your pocket.
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