If you are trying to put your children through college, you have a huge expense to think about. The new tax laws may affect how you choose to fund your child’s university education. Here are three of the ways that new federal laws are affecting college funding.
#1 You Can’t Deduct the Interest Anymore
This is the biggest downside to college funding for families. Many have taken out home equity loans or personal lines of credit. At least in the past, you could deduct the interest when it came to tax season. That has been eliminated, so don’t factor that tax savings in if you decide to take a loan to fund your child’s education.
#2 There Is a New Excise Tax on Endowments for Universities and Colleges
Increased taxes on schools will affect their budget and profits. You can be sure that at least some of the expense will be passed along in the form of increased tuition. So if tuition costs weren’t rising fast enough for you, expect that trend to continue.
#3 Alimony Isn’t Taxable for the Recipient
This is good news for custodial parents who are helping their children apply for need-based aid. Since alimony isn’t counted as taxable income, you have less household income to report when filling out financial aid applications. This may be able to help you get more student aid to offset the expense of college.
Assistance in Financial College Planning in Southern California
If you live in southern California, you can also rely on College Planning Source to help your family start your college funding process early. This will allow you to get the best education for your kids with the least financial burden. To learn more, contact us today at 858.676.0700 or submit our online contact form.