These days helping your kids finance their college education is just one of many items on parents’ plates, like funding retirement and having to support their own parents as well as younger children. This article by George Schofield in Yahoo Finance has a list of ideas to help with the college funding problems: http://finance.yahoo.com/news/dont-broke-paying-kids-college-163007050.html One thing mentioned in this article is that a 529 plan is a win-win; this may not necessarily be true. Some college financial advisers I have talked to say a 529 as it is being distributed is treated as income for the student for financial aid purposes, which can cut down on other financial aid items they might be entitled to. They say either spend right away on tuition (a hit in one year) or wait until the very end of college to use it. This is a reason for having a college adviser helping you to find the most college savings – the savings should more than offset the adviser fees, making it worthwhile to explore. Also remember that any gifts of tuition paid directly to a college for the benefit of the student by ANYONE is exempt from gift taxes, so those wealthy relatives can get the [...]
Burbank CPA Tax Musings: How the IRS Tells a ‘Loan’ from a ‘Gift’
This article in AccountingWeb by Julian Block talks about some things the IRS looks at to differentiate a loan from a gift, especially between related parties. Click on the link here: http://www.accountingweb.com/article/how-irs-tells-loan-gift/223342 There is a lesson here – make sure you document any loan you make with a note, including interest rates and repayment schedules. This will help keep the IRS from calling the loan a gift. For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Android and the IPhone: Has been Featured On https://twitter.com/bstonercpa
Tax Musings of a Burbank CPA: IRS Made Improper EITC Payments of $13.3-$15.6 Billion
This is getting a little crazy – everybody in Congress and the White House has been talking about tax fraud and the IRS still can’t put out a reasonable program to check Earned Income Tax Credit refund requests before sending out the money. Oh yeah, later they find they paid out money to unqualified people, either through mistakes or fraud. See the update in AccountingToday by Michael Cohn: http://www.accountingtoday.com/news/irs_watch/irs-made-improper-eitc-payments-of-133-156-billion-70631-1.html There has got to be something else in place – the problem is it is politically important to send out tax refunds quickly to people so only the most superficial inspection is done before the money is sent, either through checks, debit cards or direct deposit, making this type of fraud easy to do. Come on guys, let’s do a little more checking before paying this money out! For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Android and the IPhone: Has been Featured On https://twitter.com/bstonercpa