Savings and Tax Planning for College: 529 and Other Plans, Education Credits, and FAFSA Strategies

Most practitioners are aware that 529 plans are available to help fund college. With the unified estate credit at an all-time high, now may be the time to make a significant gift to a 529 plan. Under Section 529 (c)(2)(B), an individual can make a lump-sum gift to a 529 plan, spread over five years, without utilizing the exemption. What happens if a client "superfunds" a 529 plan and the child decides not to go to college? In certain cases, investing in a Roth IRA could be a better alternative.

Even with the IRS Data Retrieval Tool, professionals are often asked to help complete a FAFSA. More important than completion of the form itself are the strategies that can help students qualify for financial aid. Factors that have a substantial effect on how much financial aid a student receives include the number of siblings in college simultaneously, whether the child or parent own the account, and the type of account holding the funds (bank, 529 plans, savings accounts, or IRAs).

Education credits can help defray college expenses. The American Opportunity Credit (100% of the first $2,000 in qualified expenses) and the Lifetime Learning Credit (20% of $10,000 in qualified expenses) are more than compliance calculations on Form 8863. They are credits, not deductions, that can maximize a taxpayer's refund.

Listen as our panel of experts explores the planning possibilities for college bound children, including when and how best to contribute to 529 and other college saving plans, tips to maximize the education credits, and strategies for completing the FAFSA.

1. Overview of college planning
2. 529 plans
3. Other savings plans
   1. Coverdell ESAs
   2. UTMAs
   3. Roth IRAs
4. FAFSA strategies
5. Education credits

The panel will review these and other key issues:

• What are the considerations of implementing a 529 plan?
• Which college savings vehicles are available in addition to 529 plans?
• What strategies can be used to better qualify for financial aid?
• Which education credit(s) should be claimed and how to maximize them?

Learning Objectives

After completing this course, you will be able to:

• Ascertain which education credit is most beneficial for your client
• Identify savings plans available for college
• Determine when a Roth IRA may be a worthwhile savings strategy
• Decide when a client may benefit from a 529 plan

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and sole proprietorships, qualified business income, net operating losses and loss limitations; familiarity with net operating loss carry-backs, carry-forwards and carried interests.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).