Opens in a new tab

529 plans, other tax breaks help cover education expenses, even during a pandemic

September 5, 2020
Remote learning_girl at laptop with pencil paper_august-de-richelieu-4260478_pexels

The fall 2020 semester is starting remotely in most parts of the country. (Photo by August de Richelieu via Pexels)

School is back in session. Sort of.

In most places, both at the K-12 and college levels, students and their families are dealing with hybrid education modes.

Some classes are meeting in person, albeit dramatically altered to meet COVID-19 safe distancing policies. The rest of the time, the students are learning online.

It’s not ideal, but it’s something.

The price of learning: But one thing remains the same even when we’re dealing with the coronavirus pandemic. Classes, at all levels, are going to cost you.

In pre-college cases, many families have had to shell out for new electronic devices or add or upgrade their internet connections to make remote learning possible.

When young people headed off to university, the costs increase. Even where the schools are using hybrid methods of meeting, college kids — or their parents — must pay the many higher education expenses.

This week’s Weekly Tax Tip looks at ways the tax code can help students and families cover a variety of educational costs at all learning levels.

And this week’s Saturday Shout Out offers Tips on Spending the Money in College Savings Accounts, those popular educational cost payment options we know as 529 plans.

Ann Carrns, in her article for The New York Times, notes that 529 plan money grows tax free and can be withdrawn tax free if it’s spent on eligible education expenses. She walks us through the tax fine print governing those tax-favored withdrawals.

Worthwhile tax homework: I know you probably didn’t plan on spending your weekend doing homework, especially if you’re like me and finished your formal schooling many years ago.

But these tax lessons could really pay off, not only in helping your son or daughter (or you if you’re still going to school or going back), but in reducing your tax bills, too.

You also might find these items of interest:

 

Advertisements

🌟 Search Amazon Business and Money Books 🌟
The text link above is an affiliate ad. If you click through and then buy a product, I receive a commission.

 

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
Celebrating standard tax deductions as we return to Standard Time

November 1, 2026

We returned to Standard Time at 2 a.m. Nov. 1. That’s darkened the mood of…

Read More
TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
Leave the first comment