B.14 Education savings vehicles Flashcards

Another name for a 529 Plan, allowing either prepayment of or savings for education expenses with tax advantages.

A tax-advantaged savings plan designed to encourage saving for future education costs. It can be used for college tuition, K-12 education, and certain apprenticeship programs.

A tax-advantaged account that allows families to save up to $2,000 per beneficiary per year for education expenses, including elementary and secondary education.

A type of 529 plan that allows savers to purchase credits for future tuition at today’s rates, typically limited to in-state public colleges.

A type of 529 plan that allows funds to be invested in a range of investment options, with growth tax-free if used for qualified education expenses.

A custodial account that allows assets to be transferred to a minor, which can be used for education but is not limited to educational expenses.

Similar to a UTMA, this custodial account allows for the transfer of financial assets to a minor, providing fewer investment options than a UTMA.

Tax credits, such as the American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC), that reduce income tax liability for eligible education expenses.

A tax credit for eligible expenses for the first four years of higher education, offering up to $2,500 per student per year.

A tax credit of up to $2,000 per year for qualified education expenses at eligible institutions, with no limit on the number of years it can be claimed.

The increase in the value of investments in education savings accounts that is not subject to taxation if used for qualified education expenses.

Expenses that qualify for tax-free withdrawals from education savings accounts, including tuition, fees, books, supplies, and equipment.

A tax on unearned income of minors, which may affect earnings from investments in custodial accounts like UGMA and UTMA.

The tax rule allowing scholarships and fellowships to be tax-free if used for qualified education expenses such as tuition and fees.

A savings account for individuals with disabilities that allows tax-free savings for disability-related expenses, including education.