College savings tips

February 8, 2009 7:38:58 AM PST
During this economic crisis, Congress is working to ease tuition costs for college students and their parents. But, there are some steps you can take to ensure the money is there when your child wants to continue their education. We were joined by Alan Kahn, President of AJK Financial Group, with tips. What is the Average Cost of College Today?
· Private School Tuition, room & board = $46,000
· State School (resident) Tuition, room & board = $20,000
· State School (non-resident) Tuition, room & board = $28,000
Does not include books, computers, spending money travel time or vacations

What is the Best Way to Save for College?
Section 529 College Savings Plans
These are State Sponsored savings programs that will allow you to Save Federally Tax-Free for your children's education, unlike UGTMA accounts, which are currently taxable.
For State Residents, Will Also Grow State Tax-Free.

How Much Can Someone Gift in 2009?
· $13,000 per year, per child
· Contributions can be as high as $65,000 per child in the first year of a 5-year period ($130,000 for married couples filing jointly).
(Pre-loading the annual gift amount of $13,000 for the first 5 years).
Tip: Make College Savings a Family Affair
Invite Family & Friends to direct holiday and birthday gifts into account

What about Tax Deductions & Tax Benefits?
· State Tax-Deduction with NYS & CT Plans (NYS & CT Residents)
Up to $5,000 state tax deduction per person
** $10,000 ** (married couples filing jointly)
· New Jersey Residents ~ No State Tax Deduction
· New York, CT and New Jersey Residents ~ Earnings exempt from Federal and State Taxes

How Can You Find Out More Information About Your
State's Plan and Rewards Program?
For more information, visit www.collegesavings.org. (This website details each state's college savings plan & State tax incentives)
Upromise Rewards Program
(If Available)
· Get Free Money for College
· Get money back for college when you make purchases
· Transfer your Upromise Savings Rewards to your Section 529 College Savings Plan
ü Additional Tax Breaks for 2008-2009
Based Upon Income Qualifications
· College Education Deduction - Maximum $4,000 per year
· Hope Scholarship Tax Credits - $1,800 for first two years
· Lifetime Learning Credit - Maximum $2,000 per year


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