Providing his kids a college education is very important to Byron Williams. He and his family bought four of his kids' Florida prepaid tuition plans.
The program lets you buy two or four years of tuition at today’s prices rather than wait until your child is college-age.
For Williams it just made sense. Right now, a basic four-year prepaid tuition plan costs just over $11,000 until rates go up on January 31. That’s about $79 a month for a newborn.
“In the interest of public disclosure, my family bought two prepaid plans. But I was surprised to learn that contributions are not tax-deductible, so let’s look at some other savings options.”
Accountant Rick Carroll says 529 investment plans are popular with middle and upper-income families. Earnings are tax-exempt when used for college expenses. You can buy series e savings bonds in your name and the interest will be tax-free.
If your child is already in college, you’re eligible for up to $4,000 in tax deductions a year.
Frederick Carroll, CPA, says, “It does get complicated, and that’s why you should either spend the time to do your homework, bring yourself up on the advantages and disadvantages of each, or go see your tax advisor."
It’s not cheap, no matter how you pay for college, but parents can save thousands of dollars with a little planning. To date, families have bought 1.1 million Florida prepaid college plans.
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