By: Jamie Waggoner
Many grandparents think about their grandchildren’s education, maybe from the moment they are born.
You want them to succeed and want to make sure they can achieve great things in life.
You can help your grandchildren achieve great things by opening up a financial fund for their college education!
What form do I need?
The form you need is called a 529 plan.
With this plan you as a grandparent can put in money into this account for your grandchildren’s college education.
Best part about this plan is that it grows tax free (as long as you follow the rules).
For example, let’s say you put in $5,000 when your grandchild was born.
And that $5,000 grows to $50,000 by the time your grandchild is college age.
Your grandchild can pull out that $50,000 and spend on college without paying any tax on the $45,000 earnings.
DID SOMEONE SAY TAX FREE GROWTH?! YES WE DID!
Now this is a simplified example and, when it comes to taxes, every situation is different.
We don’t offer any tax advice on these pages, this is just information, to get you thinking of what’s out there.
Taking Your Tax Knowledge One Step Further
Now some seniors, once they start learning the “secrets” of the tax code such as this, they add an extra bonus and they start actually doing tax work for money, as a side job.
This accelerates your contributions to your grandkids’ college fund even more.
The tax industry is filled with grandparents who earn extra money from their tax work and plop it right into one of these tax-advantaged college savings vehicles.
Some tax savvy seniors even use life insurance policies to save for their grandkids’ college education because there are some interesting tax advantages for life insurance, too.
No matter how you slice it, knowing about taxes puts you ahead of the game when it comes to filling up that piggy bank for the grandkids’ college.
How to learn more
To learn more about taxes or which college funding plan is right for you, head over to prontotaxschool.com and look at some course packages.
Knowing more about taxes opens up a whole new world for people, and finding new ways to save money for worthy causes like education for your grandkids is always a plus.
Starting a college fund for your grandkids becomes so much more powerful when you’re aware of how to use the tax code to the best advantage for your family’s long-term success.
About the writer:
Jamie Waggoner is a Communication Major at University of North Carolina-Wilmington (UNCW). Jamie’s favorite course at the moment is Integrated Marketing, which shows how smart companies use storytelling and word-of-mouth to develop authentic and compelling relationships with their customers and the general public. Jamie did not realize when she accepted an internship at Pronto Tax School that she would become a tax expert, but hey, life is full of surprises and that’s a good thing.