College Tax Planning

The Boyd Viewpoint

Much like our viewpoint on retirement tax planning, our view on saving for college emphasizes a balanced approach. A balanced approach mitigates risk while allowing savings to grow in a tax-favored environment. College planning should also consider the effects your choices have on other education incentives such as credits and deductions.  Unlike retirement savings, which allows for pre-tax savings, all approaches to saving and paying for college use after-tax money. The common theme among all college savings vehicles is tax free earnings when withdrawals are used for college expenses. Our process with you will explore the following college savings methods:

  • IRC 529 college savings plan
  • Life Insurance Savings Plan
  • UTMA/UGMA accounts for children
  • Credits and deductions

Most of these savings vehicles have special rules that can cause unintended tax consequences. Our goal is to teach you how to minimize both taxes and the risk of losing principal.

The Process

  • Discuss and understand your objectives
  • Inventory your current assets
  • Provide analysis and recommendations to move towards a more balanced plan to pay for college