What are considered qualified educational expenses for 529 college-savings plans and for the Hope and Lifetime Learning tax credits?
You can use money from a 529 plan tax free for tuition, fees, books, supplies and equipment required for enrollment at any accredited college, university or vocational school in the U.S. and at many foreign colleges.
You also can use the money for room and board, as long as the beneficiary is at least a half-time student. The full cost of room and board counts if the student's housing is owned or operated by the college. Off-campus housing costs can qualify, too, up to the allowance for room and board that the college includes in its cost of attendance for federal financial-aid purposes (your college financial-aid office can give you that figure).
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
There's one big difference in the expenses that are eligible for the Hope and Lifetime Learning credits: Tuition and required fees count for the write-off, but room and board do not.
For details about the tax rules, see IRS Publication 970, Tax Benefits for Education. For more information, see Everything You Need to Know About 529s and our new Paying for College center. Also see Best Ways to Cash In College Accounts for advice on withdrawing money from your 529 without jeopardizing your eligibility for the Hope and Lifetime Learning credit.
-
Stock Market Today: The Dow Adds 15 Points To End Its Losing StreakEquity indexes opened higher but drifted lower as markets priced in new Fed forecasts.
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
3 Key Ways You Can Help a Child or Grandchild Pay for Collegecollege Options such as 529 plans, education savings accounts and tax-free gifts can ensure you don’t carry a child’s student loan debt into your golden years.
-
The Best Ways to Pay for College Involve Starting Youngcollege College 529 plans vs. Roth IRAs: A financial expert shares what she wishes she had known when saving for her own law school and her son’s college. Taking her advice could put you years ahead of the game.
-
Retirees: Here’s How to Pay for 5 Common Expenses and Cut Your Taxes While Doing Ittax planning With tax planning still fresh on the minds of many retirees following the tax deadline, here are five tax-savvy ways to pay for expenses throughout the year that could save hundreds or thousands of dollars in taxes.
-
Five Best Financial Gifts for Grandkidsgift ideas If you've been giving your grandchildren cash for the holidays, now is a good time to rethink that. There are other financial gifts that will help teach them the value of money and set them up for life.
-
UTMA Accounts Explained: Rules, Custodial Brokerages and Morepersonal finance Giving your kids or grandkids a leg up in life is a nice thing to do, but if you’re thinking of doing it with an UTMA custodial brokerage account, you need to know a few of the pros and cons that come with them.
-
School’s Out for Summer … But Tuition Is Back in the FallPaying for College Giving the gift of education never goes out of style. Here are some different options for helping out the young person in your life.
-
How to Make the Most of Your Finances in Your 30spersonal finance It’s easy to get caught up in the day-to-day challenges of a burgeoning career, friends and family life, but your 30s are the perfect time to get your finances running smoothly.
-
Is Your Financial Plan Ready for Higher Taxes?tax planning The best plans anticipate what’s to come, and right now it’s looking more and more likely that the future could hold higher taxes, especially for the wealthy. Here’s what might be on the horizon, and a look at some ideas to help prepare for it.
