Saving For College
This newly passed legislation really doesn’t surprise me. From what I had been told this most recent amendment to the ‘kiddie-tax’ has been coming down the road for a while. Basically, they are trying to prevent people with the highest income from stashing their income under their kid’s name. Those days are officially no-more.
It’s clear to me that the 529 plans across the country are going to be seeing a considerable upsurge in participation due to this new piece of legislation. I am actually a big fan of the 529 programs out there. There are some really good online resources to tap into to get up to speed on which states have the best rated plans and what may work best for you.
Another type of banking product to consider is a Coverdell Educational Savings Account for your little ones. For a more thorough definition of what they are click the link. For me, the E.S.A. is a good way for my wife and I to save for our kids (potential) primary and secondary schooling – tax deferred. Meaning, we can start saving for our boys to go to a good private middle-school (the local public middle schools in our area are awful and scary), which is over ten years away. And if we decide change plans (say we move to another area that has good public schools and decide to have them go there), we can hang onto the E.S.A. funds and use it for their college tuition.
Related Links;
GreatSchools.net
SavingForCollege.net
CNN Article about Kiddie Tax Changes
