Personal Finance

We are dedicated to keeping clients abreast of the latest developments and tax-saving strategies. This section includes a library of hundreds of timely articles about business, taxes, finances, trends and the like. The articles are categorized by subject matter, which can be accessed from the links. Click on your topic of interest and find a wealth of information.

TAX BREAKS FOR EDUCATION & STUDENT AID INFORMATION

This section is provided to assist clients in the various aspects of post-secondary education planning including tax benefits, aid programs, educational savings programs, etc. We encourage you to call for an appointment so that we can help you plan for your children’s education.

Above-The-Line Education Deduction: Although this provision expired at the end of 2009, it is likely this provision will be extended to 2010 as it is included in the House Bill (HR4213) that was passed on May 28, 2010 and now awaits Senate approval. Watch for further developments!Taxpayers...
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Education Credits Can Be Claimed On An Amended Return: The IRS has announced that individuals who could have claimed the education credit but failed to do so on their original returns, may claim the credit on an amended return. In general, an amended return may be filed within three years from the date your...
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Coverdell Education Savings Accounts: Coverdell accounts are education trusts that allow funds to be put away for a child's education. Tax on earnings from these accounts is deferred until the funds are withdrawn, and if used for qualified education purposes, the entire withdrawal can be...
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Deduction for Higher Education Interest: Generally, taxpayers can only deduct home mortgage interest, investment interest, and business interest. However, interest paid on student loans used to pay tuition, room and board and related expenses for qualified higher education is an above-the-line...
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Education Credits - Who Gets the Benefit?: It might not be who you would expect to receive the credit. The IRS has provided clarification as to who can claim the education credits. These are credits allowed for qualifying higher education costs for yourself, your spouse, or your dependents. Under...
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Educational Tax Credits: The law provides for two nonrefundable tax credits, the American Opportunity (or Hope Scholarship credit) and the Lifetime Learning Credits. Both credits will reduce a taxpayer's tax liability dollar for dollar until the tax reaches zero. Any Hope or...
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Self-Employed Education Twists: Self-employed taxpayers should consider their options carefully when it comes to applying tax benefits for their own education tuition and expenses. Tax law provides multiple ways to benefit from the educational expenses and one may provide more benefit...
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Home Equity Can Provide Funds for Children's Education: Many parents of college age children would like to utilize the equity in their home to help pay for college expenses. When considering this course of action, there are two issues: (1) Should the first trust deed be refinanced, or should a second trust...
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Penalty-Free IRA Withdrawals: Generally, when funds are withdrawn from an IRA before a taxpayer reaches age 59-1/2, a 10% early withdrawal penalty applies to the distribution. However, penalty-free withdrawals are permitted if the funds are used to pay qualified higher education expenses....
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Qualified Tuition Programs - Section 529 Plans: Section 529 Plans (named after the section of the IRS Code that created them) are plans established to help families save and pay for college in a tax-advantaged way and are available to everyone, regardless of income. These state-sponsored plans allow...
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Electing Out Of & Maximizing the Hope Credit: CAUTION: This article does not apply to tax years 2009 and 2010 since the American Opportunity Credit replaces the Hope Scholarship Credit for those years.For taxpayers that strive to maximize their tax benefits, the Hope education credit can be challenging....
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Use Appreciated Stock to Fund Obligations: You might want to consider gifting stock that has appreciated in value to your children (over age 23) to help pay for their education or to purchase a home, or to parents to help pay for their eldercare. By doing this, you shift the tax liability for...
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