Issue link: http://viewer.e-digitaledition.com/i/373900
W ITH THE EVER-INCREAS- ING cost of college tuition, you may be tr ying to make sense out of all the information available on how to fund college tuition. Here is some interesting information that may be helpful. 529 Plans Establishing a 529 plan early is one of the best ways to fund tuition. Money contributed into 529 plans grows tax deferred and can come out tax-free if used for tuition, room or board. Flexibility in changing beneficiaries is also a plus so one account could be used for multiple children. The annual limit is $14,000 before a gif t ta x return needs to be filed. Contributions for five years can be combined and $70,000 ($140,000 if joint gifts) can be contributed in a single year. The downside of 529 plans is that their existence needs to be disclosed when applying for any financial assistance and therefore counts against you. Roth IRAs If you own your own practice or per- haps a side business, consider putting your son or daughter on payroll in order to make them eligible to contribute to a Roth IRA. By doing so your business gets a tax deduction for the wages paid. The wages reported by the child could be tax free up to certain limits. The funds in the Roth grow tax-free and can then be pulled out of the Roth to fund tuition as needed. A Rich Relative Although you should not count on hav- ing a rich relative in order to fund tuition, there is an estate planning consideration. Taxable estates could be reduced by "direct contribution" to a college or university. These payments made on behalf of the student can only be used for tuition. These different scenarios are not meant to be all-inclusive. Given the right circumstances, rental real estate could also work if set up properly. Careful planning with your tax advisor and/or attorney is essential. Rich Weidrick is a CPA and a Principal of Weidr ick Livesay & Company in Akron, OH. ■ By Richard Weidrick, CPA Funding College Tuition +++++++++++++++++++++++++ +++ + +++ + +++++++++++++++++++++++++ ❮ BUSINESS SECTION HEALTHCARE ADVOCATES, INDUSTRY LEADERS With more than 40 years of experience, our Healthcare Section offers Healthcare Representation & Counseling, Coding Review and Staff Training. We make it possible for you to focus on patient care, while we tackle the legal obstacles you are faced with on an ongoing basis. WE ARE THE HEALTHCARE SECTION OF KRUGLIAK, WILKINS, GRIFFITHS & DOUGHERTY, CO., L.P.A. 4775 Munson Street N.W. | P.O. Box 36963 | Canton, Ohio 44735 | 330-497-0700 | Fax 330-497-4020 John M. Tucker • Randall C. Hunt • Fred J. Haupt Jason F. Haupt • Laura A. Brady Offices in Canton, Akron, Alliance, New Philadelphia & Sugarcreek KWGD.com