Education Savings

How Much Should Parents of Young Children be Saving in 529 Plans?

To deal with this logically, you have to back into the figure after making a few assumptions. Let’s say you have a five year old child that you expect will one day attend an expensive private college. The tuition, fees, and room and board at such a college cost roughly $70,000 per year today or […]

If You Don’t Have the Money to do Both Simultaneously, Should You Save For Your Future Retirement or For Your Child’s Future Education?

Each of us has to answer that for him/herself, but here’s my take on it. I’d opt for retirement savings first. My primary reason is that there is outside help available for a child’s education, but not for retirement. Loans are available to fund college expenses but are not available to fund retirement costs. My […]

Merit Scholorships Readily Available to High Caliber Students

A Silver Lining With Rising College Costs – These Colleges are Dramatically Increasing Their Merit Scholarships to Attract Top Students:  Pricey colleges that aren’t at the highest tier are working hard to counter the public perception that their degrees aren’t worth the cost – that is compared to some excellent lower-cost state schools or the […]


This Newsletter continues the discussion of Tax Reform’s changes to businesses and will primarily cover the phenomenal new depreciation rules.  Perhaps the single biggest change in the entire Tax Cuts and Jobs Act is the move to 100% first-year depreciation for most business assets.  But, this isn’t all.  The new law makes major changes to […]

Children’s Education Funds

There can be other methods, but the four ways we typically see parents save for future education costs are in one or more of (A) an account in the parent’s name, (B) a custodial account for the child, (C) a Roth IRA for the child, or (D) a Section 529 plan for the child.  Here […]

Consolidated Debt That Includes Tuition for a Residency Program

If your risk tolerance is high enough, then you might consider paying and deducting through your practice the portion of your consolidated loans that represents your post-dental (or post-medical) residency program.  In the IRS’s wonderful Revenue Ruling 74-78, a young general dentist enrolled in an orthodontic residency program.   Because the residency program advanced his career […]

401(k) Hardship Distributions Should Not Be Used as a Planning Technique for a Child’s College Education, Particularly With Tax-Free 529 Plans Readily Available

The young dentist associate’s financial advisor recommended that she make Roth 401(k) salary deferrals to the employer’s 401(k) profit sharing plan.  When the children are college age, the employee can claim a financial hardship and request a distribution from the plan to pay the tuition.  There are a couple problems.  While a child’s college tuition […]

Estate and Gift Tax Opportunity for Grandparents Contributing to Grandchildrens’ 529 Plans

There is a wonderful gift and estate tax advantage in the tax laws where a person (say, a grandparent) can contribute in one year up to $70,000 ($140,000 if coming from a couple) without any adverse gift tax consequences if the money is treated as advance funding of five years’ worth of the annual $14,000 […]

Parents Cannot Deduct the Interest if They Repay a Child’s Student Loans

To be deductible, the parent would have also had to be legally liable for the loan repayment.  However, even if the parents make the repayment, the child can still claim the deduction.  The tax laws treat the parent as gifting the money to the child and the child then paying off the loan.  The child […]

Make Gifts To Children Well Before December 31

If reducing your estate makes sense and if it will help, not hurt, your child, then make gifts down to the next generation.  You can give up to $14,000 per year to as many people as you choose without any negative gift or estate tax consequences.  If you want to give more than $14,000 to […]

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