education

Best 529 Plan Wisconsin Residents

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The best 529 plan for Wisconsin residents depends on how you want to invest funds for your child or other beneficiary. Students may attend any college or university in any state regardless of any investment in the Wisconsin 529 plan. For example, you can save in a Wisconsin 529 plan and your daughter can go to Duke and your son can go to Stanford. Likewise, you do not have to use the Wisconsin 529 plan even if you live in Wisconsin. However, you may not get the state tax benefits from a plan managed by a different state. Tomorrow’s Scholar Wisconsin 529 Plan Option The Tomorrow’s Scholar plan is offered by Voya and it offers 3 ways to invest. Edvest Wisconsin 529 Plan Option Details The Edvest Wisconsin 529 Plan investment options. Find out about the Colorado 529 plan here. Wisconsin Taxes 529 Plans Wisconsin 529 plan contributions are not tax-deductible on federal income taxes. The maximum contribution limit for a Wisconsin 529 plan state tax deduction is $3,380 for a single beneficiary in the tax year 2021. The maximum contribution deduction in 2022 is $3,560 for a single beneficiary. There is no limit on the number of beneficiaries that …

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FAFSA Scam on FAFSA.com

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A FAFSA scam is a bad way to start off your hunt for financial aid. If you, or someone you know, is going to college, or starting at a university, then chances are you need to apply for financial aid. Even if you don’t think you’ll qualify, there are often partial grants, federal loans, and various work-study programs that can help pay for college. Remember: the legit FAFSA website is FAFSA.gov. To apply for any federal financial aid, you’ll need to fill out a form called the FAFSA, the Free Application for Federal Student Aid. This form requires you to submit detailed financial information, which is verified against IRS records, and requires you to sign that all information is true under penalty of perjury. This is better than anyone else can really do as far as verifying your financial status, so many other financial aid grantors, including the universities themselves, rely on your submitted FAFSA. You have to fill out a FAFSA every year you are in college to continue to qualify for need-based financial aid. This is not one of those programs where you fill something out once. The easiest way to submit your FAFSA is online at fafsa.gov …

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529 Contribution Limits 2021

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The 529 plan is a tax-advantaged college savings plan. Of course, like all plans that offer IRS sanctioned tax savings, there are rules and regulations regarding just how and when a 529 plan may be used. One of these limitations involves how much money you can contribute to a 529 plan in 2021. 529 contribution limits tend to be pretty stable, based mostly on the federal gift tax exclusion amount. Head over here if you are looking for how a 529 plan works. If you want to know how to open a 529 plan account then head here. 2021 529 Contribution Limits Unlike IRA plans, where there are new IRA contribution limits, or other child tax credits, there are no income limits for 529 plans. That means that you can contribute to a 529 plan regardless of whether you are a high-income taxpayer or not. There are, however, still a few kinds of contribution limitations for 529 savings accounts that you want to be aware of. The first 529 plan contribution limit comes from the 529 plan rules established by each individual plan. Since 529 plans are administered by each of the 50 states, there can be 50 different plan rules. For …

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What Is Education Tax Credit

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What is education tax credit on taxes? How to qualify for education tax credit? What are the income limits for the education tax credit? Claiming the education tax credit is easy, as long as you are one of the people who qualifies for education tax credit. Education Tax Credit Taxes The 2020 Education Tax Credit is the name for two separate education tax credits, the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). American Opportunity Tax Credit 2020 The American Opportunity Tax Credit for 2020 is $2,500 maximum. The American Opportunity Tax Credit allows you to claim all of the first $2,000 you spent on tuition, fees and equipment. Most full-time students hit $2,000 on tuition and fees alone. You also get to claim 25% of the next $2,000. That means you need to spend $4,000 to get the full credit. You get $2,000 credit for the first $2,000 and then $500 (25% of $2,000) for the next $2,000. Again, many full-time students will hit the $4,000 just with their bill from the university. You cannot claim living expenses like dorm room fees, but you can claim equipment you buy including laptop computers, tablets, and iPads that …

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Covid Student Loan Relief Ending Soon

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In March, the government began offering options to help benefit borrowers with student loans during the Covid pandemic. The Covid student loan benefits were to stop collecting on student loans, to charge 0% interest rates on student loans, and to suspend student loan payments. Basically, you could turn off paying on your student loans with no detriment. Or, if you were one of the lucky ones still doing well during the Covid crisis, you could keep making loan payments and get ahead thanks to zero percent interest. The benefits only applied to federal student aid loans, and do not apply to private student loans. One of the downsides of programs like SoFi student loan refinances is that the refinanced loans become private student loans and no longer benefit from any federal student loan programs, even though the Sofi student loans interest rates can be much lower than regular student loans. Private student loans are not regulated by the Department of Education Student Loan Covid Scams Unfortunately, as is often the case, scammers were not far behind the news announcing these student loan aid provisions. They came back out when Congress passed a law making the Covid student loan aid last …

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Saving Money Into 529 Plan

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OK, if you have already opened a 529 plan, and you have chosen which investments to use in your 529 plan, then the next step is to actually start getting money into your college savings account. And, it is here where the most important thing about saving money for college comes into play. The most important thing, more important than choosing the right college savings plan, more important than choosing which investments to use in your college savings plan, and more important that updating your higher education financial plan, is consistently automatically investing money in your college savings accounts. Let me go into a little more detail, it’s that important. We get caught up in the notion that what matters when saving or investing money are things like investment returns, taxes, using the right account, or getting the right financial advice. None of those things matters nearly as much as consistently investing more money. When I was a financial advisor some of the biggest 401k accounts, or 457 plans, I ever saw were from people who didn’t know a thing about them. These people opened the account when they were hired, set some sort of amount to contribute, picked an investment, or …

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Saving Money for College The Basics

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Saving money for college has always been an important financial goal for many parents. It is only becoming more important as college tuition continues to skyrocket, and stories of people buried under huge student loan burdens become more common. Before we jump into the nuances of the many different ways to save for college, let’s start with the basics. How Much To Save For College I’ve talked before about how hard it is to make a financial plan for retirement because of how many variables there are. You don’t know when you will start retirement, you don’t know how long you will live once you do retire, and you don’t really know how much money you will spend each year during retirement. Add it all up, and any retirement plan is a lot of guesswork.Fortunately, making a financial plan for education comes with a little more certainty to work with. For starters, you have a pretty good idea of when your children will start college. Take the grade they are in now, and count until you get to their senior year. The next year, is the first year of college. Granted, there are always exceptions, and your child may take …

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Cost of Raising a Child

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Every year, the United States Department of Agriculture publishes a report about how much it costs to raise a child until age 18 in America. Of course, the information is only an average, and even then, to make any sort of calculation, a lot of assumptions have to be made. After all, raising a child is a very personal experience and the cost varies a lot based on the choices you make, not to mention variations based on where you live. It obviously takes a lot of time to compile all the necessary data, so the report with numbers for 2013, was just released here in fall of 2014. You can find the full-report, or cute graphics containing the official report’s details at the USDA’s website. Raising A Child Costs Money It’s no surprise to any parent that kids can be expensive. Of course, there is food and clothing. Then, there is education, insurance, school supplies, birthday parties, and so on and so on. So, how much does it cost to raise a child from birth to 18? The report breaks out various categories, but the quick version is this: Urban West $261,330 Urban Midwest $240,570 Urban Northeast $282,480 Urban …

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Are You Paying for College Wrong?

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There is an article floating around on Marketwatch titled Parents You’re Paying for College Wrong. This kind of article is one of the reasons I write Finance Gourmet. After being a Financial Planner in Denver for several years (and, yes, I was a Certified Financial Planner), I saw a lot of different financial situations from a lot of different people. I realized two things: Too often useful information gets bogged down and confusing because it spends so much time covering small, infrequent, exceptions to the rule. On the other hand, useful information is often harmful because it glosses over all of the possibilities in favor of hard and fast statements that aren’t necessarily accurate for everyone. If those to reasons seem a bit contradictory, then you understand why writing personal financial advice can be tricky. How To Pay for College The Wrong Way According to the article on Marketwatch, a lot of parents are “paying for college in ways that experts say aren’t smart.” Fair enough, that’s probably true. However, the way the article goes on to explain what is “smart,” makes it sound like you are a fool for doing certain things that are not foolish whatsoever. The important thing …

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How People Pay for College

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Here is an interesting infographic from Sallie Mae, the quasi-government entity that handles most federal student loans today. It goes with an upcoming post about financial articles and how people are supposedly paying for college “the wrong way.” While you’re at it, check out our article about opening a 529 plan account online to save for your child’s college education.