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Saving for College – 2025 Tax Benefits Guide
College tuition costs continue to rise, but smart planning can make a big difference. By using tax-advantaged accounts and strategies, you can reduce the cost of higher education for yourself, your children, or other family members.
Our Saving for College Tax Benefits 2025 Guide explains the most effective ways to save, invest, and pay for education while maximizing available tax benefits.
What’s Covered in the Guide?
- 529 Plans (Qualified Tuition Programs) – Tax-free growth and withdrawals for qualified expenses, plus expanded uses for K-12 tuition, apprenticeship costs, and student loan repayment
- Coverdell Education Savings Accounts (ESAs) – Flexible savings for K-12 and college expenses with investment growth potential
- Custodial Accounts (UTMA/UGMA) – Education savings in a minor’s name with control until adulthood
- Savings Bond Interest Exclusion – Tax-free bond interest for qualified education expenses within income limits
Qualified Education Expenses Include:
- Tuition, fees, books, and required supplies
- Room and board for students enrolled at least half-time
- Computers, software, and internet access for educational use
- Special needs services related to enrollment or attendance
Key Contribution Rules:
- 529 Plans: No annual limit, but contributions can’t exceed anticipated qualified expenses
- ESAs: $2,000 annual contribution limit per beneficiary, with income-based contributor restrictions
- Custodial Accounts: No contribution limit, but assets belong to the minor
Why Use Tax-Advantaged Education Savings?
By choosing the right account, you can grow your savings tax-free and withdraw funds without paying federal income tax for qualified expenses. These strategies can significantly increase the value of your education fund over time.
Download the 2025 Saving for College Tax Benefits Guide or contact us to determine which strategy best suits your goals.