College Costs

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Scholarships are usually tax free but they may result in taxable income

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August 10, 2021 ,

scholarship tax

If your child is fortunate enough to be awarded a scholarship, you may wonder about the tax implications. Fortunately, scholarships (and fellowships) are generally tax free for students at elementary, middle and high schools, as well as those attending college, graduate school or accredited vocational schools. It doesn’t matter if the scholarship makes a direct payment to the individual or reduces tuition.

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You may have loads of student debt, but it may be hard to deduct the interest

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July 27, 2021

student loan interest

More than 43 million student borrowers are in debt with an average of $39,351 each, according to the research group EducationData.org. If you have student loan debt, you may wonder if you can deduct the interest you pay. The answer is yes, subject to certain limits. However, the deduction is phased out if your adjusted gross income exceeds certain levels — and they aren’t as high as the income levels for many other deductions.

Continue Reading: You may have loads of student debt, but it may be hard to deduct the interest

Tax-favored ways to build up a college fund

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June 15, 2021 , , , ,

college fund taxes

If you’re a parent with a college-bound child, you may be concerned about being able to fund future tuition and other higher education costs. You want to take maximum advantage of tax benefits to minimize your expenses. Here are some possible options.

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Educate yourself about the revised tax benefits for higher education

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January 12, 2021 , , , ,

higher education tax credit

Attending college is one of the biggest investments that parents and students ever make. If you or your child (or grandchild) attends (or plans to attend) an institution of higher learning, you may be eligible for tax breaks to help foot the bill.

The Consolidated Appropriations Act, which was enacted recently, made some changes to the tax breaks. Here’s a rundown of what has changed.

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How Series EE savings bonds are taxed

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November 10, 2020 ,

Series EE Savings Bonds

Many people have Series EE savings bonds that were purchased many years ago. Perhaps they were given to your children as gifts or maybe you bought them yourself and put them away in a file cabinet or safe deposit box. You may wonder: How is the interest you earn on EE bonds taxed? And if they reach final maturity, what action do you need to take to ensure there’s no loss of interest or unanticipated tax consequences?

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Back-to-school tax breaks on the books

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September 2, 2020 , , ,

education tax breaks

Despite the COVID-19 pandemic, students are going back to school this fall, either remotely, in-person or under a hybrid schedule. In any event, parents may be eligible for certain tax breaks to help defray the cost of education.

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Are scholarships tax-free or taxable?

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July 28, 2020 , ,

taxable scholarships

COVID-19 is changing the landscape for many schools this fall. But many children and young adults are going back, even if it’s just for online learning, and some parents will be facing tuition bills. If your child has been awarded a scholarship, that’s cause for celebration! But be aware that there may be tax implications.

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Student loan interest: Can you deduct it on your tax return?

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May 26, 2020 , ,

student loan interest deduction

The economic impact of the novel coronavirus (COVID-19) is unprecedented and many taxpayers with student loans have been hard hit.

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Congress gives a holiday gift in the form of favorable tax provisions

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December 24, 2019 , , ,

2020 tax laws

As part of a year-end budget bill, Congress just passed a package of tax provisions that will provide savings for some taxpayers. The White House has announced that President Trump will sign the Further Consolidated Appropriations Act of 2020 into law. It also includes a retirement-related law titled the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

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Use a Coverdell ESA to help pay college, elementary and secondary school costs

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October 15, 2019 ,

Coverdell ESA

There are several ways to save for your child’s or grandchild’s education, including with a Coverdell Education Savings Account (ESA). Although for federal tax purposes there’s no upfront deduction for contributions made to an ESA, the earnings on the contributions grow tax-free. In addition, no tax is due when the funds in the account are distributed, to the extent the amounts withdrawn don’t exceed the child’s qualified education expenses.
Continue Reading: Use a Coverdell ESA to help pay college, elementary and secondary school costs