School is starting. Parents rejoice! I met a couple the other day that were out getting coffee in the morning because they had just dropped their child off for his first day of pre-school. They seemed very confused, and admitted they didn’t know what to do with their newly found free time. Kids are great. You get to watch them grow and play, and teach them how to be an integral part of our society. Kids are the biggest investment you can make in your life, and theirs.
A recent study found it costs, on average, $233,000 to raise a child to age 17
That equates to about $14,000 a year, and doesn’t even include college. It’s staggering. Thank goodness there are tools to help out parents. For example, back to school shopping weekend, when school supplies are tax free. Tax credits on your income are another way parents can catch a break on their bill. As far as tax breaks go I would suggest finding a trusted CPA who can help you get most from your taxes, so you can re-invest in your child’s future. How can you do that you ask? One of the main ways to invest in your child’s future is to save for their college, especially since that is not included in you quarter of million dollar bill up front.
If you live here in Florida a great way to do that is to set up a Florida Pre-paid account. This is slightly different than the well-known 529 college savings plan. One of the main differences between Florida Pre-paid and 529 plans is that Pre-paid is guaranteed by the state. You can’t lose money. In a normal 529 risk is determined by the investments selected. However, with a normal 529 savings plan you get a little more flexibility with your college selection, covering housing costs, etc. Children are expensive. If you have a plan in place you have a better chance at being more prepared to give your child everything they need and want. Here’s to a great school year for all!
This show is all about the future, specifically your future and your finances. This week on the Let’s Talk Future show we talked about, you guessed it, back to school and how to plan your money when you have kids. CPA Betty Haas was on the show helping make sense of some confusing tax issues such as daycare, college tax credits, and sharing some anecdotal evidence on why it’s important to save and pay attention to your taxes. If you missed this show be sure to follow the link below.
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“The greater part of our happiness, or misery, depends on our disposition and not on our circumstances. – Martha Washington”
Investors should carefully consider the investment objectives, risks, charges and expenses associated with 529 plans before investing. This and other information about 529 plans is available in the issuer’s official statement and should be read carefully before investing. Investors should consult a tax advisor about any state tax consequences of an investment in a 529 plan. As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. Investors should consider, before investing, whether the investor’s or the designated beneficiary’s home state offersany tax or other benefits that are only available for investment
in such state’s 529 savings plan. Such benefits include financial aid, scholarship funds, and protection from creditors. The tax implications can vary significantly from state to state. This information has been obtained from sources deemed to be reliable but its accuracy and completeness cannot be guaranteed. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Raymond James is not affiliated with Betty Haas, CPA. Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax issues, these matters should be discussed with the appropriate professional.