#Savings planner 2017 free download code#

Those payments are exempt from gift taxes as long as they’re made directly to the child’s college or university to cover the cost of tuition. Grandparents (or other well-off relatives) can also reduce the size of their estates by contributing directly to your child’s school. And unless Congress agrees to extend the provisions in the 2017 Tax Cuts and Jobs Act, the federal estate tax exemption will drop to $5.49 million after 2025. While the 2022 federal estate tax exemption is $12.06 million ($24.12 million for a married couple), several states have much lower estate-tax exemptions.

In addition to jump-starting a 529 plan, this strategy will reduce the size of your estate for purposes of estate taxes. But if you’re contributing to a 529 plan, you can combine five years’ worth of gift tax exclusions into one year, which means you can contribute up to $80,000 in 2022 ($160,000 for a married couple). The maximum amount grandparents or others can give in 2022 without filing a gift tax return is $16,000 per recipient (a married couple can give away up to $32,000 per recipient). That’s particularly significant for grandparents who want to use a 529 plan as an estate-planning tool. Starting with the 2024–25 academic year, withdrawals from a grandparent’s (or other non-parent’s) 529 plan will no longer be counted as student income. Currently, distributions from a 529 plan owned by grandparents (or other non-parents) are treated as student income on the Free Application for Federal Student Aid (FAFSA), potentially reducing the amount of financial aid the student is eligible to receive. Other family members can also contribute to a 529 plan for your kids, and an upcoming change in federal financial aid rules removes a downside to those accounts. If you start early, even a modest monthly investment will add up over 18 years. But most plans let you start small-$25 is a common minimum investment requirement, and some have no minimum. Some critics say 529 plans unfairly benefit well-off families, and there’s no question that you can stash a lot of money in these plans-up to $550,000 in some states.

Some states allow you to deduct a portion of your contributions from your state taxes, usually as long as you invest in your own state’s plan (for a rundown, go to If you don’t use the money for college, the earnings portion of your account will be subject to income taxes and a 10% penalty. If your child receives a scholarship and doesn’t need the money, you can change the beneficiary to another eligible child or family member. Contributions aren’t deductible on your federal tax return, but the money grows tax-free, and withdrawals are tax-free as long as the money is used for qualified expenses, which include tuition, room and board, books, computers, and internet access. The most effective way to save for college is to start contributing to a 529 college-savings plan while your child is still in diapers.

#Savings planner 2017 free download code#

Fortunately, just as the government provides tax incentives for home buyers, the tax code includes a lot of credits and deductions designed to lower the cost of college. But for Ivy League and many selective private colleges, the annual cost is more than $75,000. The average annual cost of tuition, room and board for a four-year in-state public college in 2021 was $22,690 a year, while the average annual cost of a four-year private school was $51,690, according to the College Board.