Paying for college is one of the best investments that a parent can make for his or her children. It’s not cheap, however. Even many of our state institutions such as San Francisco State University, or Cal State East Bay, or San Jose State are not cheap. And that is not to mention universities such as the world-famous University of California at Berkeley. And then, we are fortunate to have many private institutions such as the University of San Francisco. Wherever you choose to send your child, it will not be cheap!
However, we know higher education is a good investment. We help our clients to minimize their taxes, and you may not be aware but there are certain tax credits that are available to parents who are sending their children to universities or colleges. Recent legislation signed by Pres. Obama has extended many of these credits. For example, there is the American Opportunity Tax Credit, which offers more annual tax savings than the HOPE credit and is available to people with higher incomes. In addition, compared to the HOPE credit, the AOTC can be used throughout the four years of college. Recently, Pres. Obama and Congress extended this benefit via the so-called PATH legislation. To read about tax benefits for education, you can visit the special IRS information center, here.
Technology Benefits for Bay Area Residents: Computers
Another exciting benefit that can help many of us who live in the San Francisco Bay area is that computers are now seen as qualifying expenses, regardless of whether or not they are formally required by your college or university. That’s great for those of us who live here, because nearly everyone here has at least one computer. If you buy a computer for your son or daughter that would be deductible.
And yet another exciting opportunity is the so-called 529 plans. These allow you to save for your children’s future education. There also what are called the 520A plans.
There are a lot of available savings to parents who are sending their children to college. It can be complicated! We serve many parents here in the city of San Francisco and throughout the San Francisco Bay area who are planning for college, or are already sending their students to college.
If you fit either of those two criteria, please reach out to us for consultation. We are experts at financial planning and we can help you optimize your strategies so that you minimize the cost of college. It’s expensive, so why shouldn’t you do your best to minimize the cost?