|
Posted by on March 16, 2008, 7:05 am
I purchased some US Savings Bond years ago for my daughter's college
education. She is less than 2 years away from college and the bonds
have accumulated a fair amount of interest that has yet to be taxed.
At this point, I'm not sure cashing in the bonds to pay for qualified
expenses offers any real tax benefits. A number of other education
related tax credits and deductions are currently available. I hope
(no pun intended) to use the Hope credit in her first two years of
college. In the subsequent years, the Life Long Learning credit,
$4,000 income deduction, or $4,000 of tax-free interest on the bonds
all appear to offer about the same benefit based on my tax bracket.
Am I missing anything in the educational tax benefit of US Savings
Bonds? If not, are there any other tax reduction strategies that can
be used for US Savings Bonds? It's very unfortunate I cannot donate
them to a charity and receive the same tax benefit available for other
appreciated assets.
Thanks!
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
|
Posted by TB on March 17, 2008, 12:04 am
westwood1308-google@yahoo.com wrote:
> Am I missing anything in the educational tax benefit of US Savings
> Bonds?
You're aware of this, yes...?:
http://www.treasurydirect.gov/indiv/planning/plan_education.htm
-Tad
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
|
Posted by on March 17, 2008, 7:04 pm
> westwood1308-goo...@yahoo.com wrote:
> > Am I missing anything in the educational tax benefit of US Savings
> > Bonds?
>
> You're aware of this,
yes...?:http://www.treasurydirect.gov/indiv/planning/plan_education.htm
>
> -Tad
>
I thought I read in Pub 970 the interest deduction was limited to
$4,000 per year. I must have been confused. There appears to be no
limit other than the MAGI phase out. Thanks for the reply stating the
obvious.
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
|
Posted by Tad Borek on March 17, 2008, 8:13 pm
westwood1308-google@yahoo.com wrote:
> I thought I read in Pub 970 the interest deduction was limited to
> $4,000 per year. I must have been confused. There appears to be no
> limit other than the MAGI phase out. Thanks for the reply stating the
> obvious.
You might be thinking of the tuition & fees deduction - $4k cap, it's
addressed in Pub 970.
As you've found there's a bunch of possible tax benefits to juggle. It's
important to do some planning to the extent you have control over how
much income you realize in a given year, because a higher AGI can
disqualify you from a tax benefit.
-Tad
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
|
Posted by on March 18, 2008, 5:03 am
>
> As you've found there's a bunch of possible tax benefits to juggle. It's
> important to do some planning to the extent you have control over how
> much income you realize in a given year, because a higher AGI can
> disqualify you from a tax benefit.
>
> -Tad
>
I agree. I will qualify for the 401K "catch-up" contributions in the
near future. This offers an additional opportunity to manage my AGI
while paying for educational expenses. Of course, it is a bit
daunting to think about contributing ~$20,000 to a 401K at the same
time there is a child in college.
Thanks again for your insights!
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
| Similar Threads | Posted | | savings bonds - EE vs I - | July 18, 2008, 1:44 pm |
| Savings Bonds Beneficiary Question | October 6, 2006, 5:03 am |
| savings bonds purchasing limits | January 14, 2008, 10:58 pm |
| Mutual Funds, Roth IRA, Savings Bonds, TSP, and Annuities... What else can I do? | February 5, 2008, 5:46 am |
| Refinancing Strategies | April 8, 2008, 1:50 pm |
| Excellent article on Roth conversion strategies | July 22, 2007, 9:58 pm |
| Why bonds? | March 16, 2007, 8:40 am |
| EE Bonds | November 6, 2007, 8:50 pm |
| Bonds | February 28, 2008, 9:25 am |
| Bonds vs CDs | November 3, 2008, 8:52 pm |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap