I have mutual funds, a Coverdell, a 529, and a Roth. Which do we use initial for my son’s college? — P. Hazen, Wilmington, Del.
Take into comment taxes and, if we qualify, need-based aid, says Troy Onink, CEO of Stratagee.com, a college-planning firm.
Start with a 529 and Coverdell Education Savings Account: Withdrawals for authorised expenses, such as fee and books, aren’t taxed or counted as income in financial-aid calculations.
You competence also daub a mutual supports to get a American Opportunity Tax Credit, value as most as $2,500 annually. You’ll have to spend adult to $4,000 from sources other than a 529 or ESA; a income phaseout is $180,000 for couples and $90,000 for singles.
Save a Roth for final (using it usually if you’re already set for retirement). You can repel contributions tax-free; gain used for propagandize are taxed as income.
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