Ask Rande 10,000+

Top 336. Oct 19, 2001 11:22 AM

» Thruhiker - Re: Re: An I-Bond correction...

In response to message posted by Karin_:

karin, no, that is not correct. the max amount you can buy at one time is 1,000; but you can keep going on and process another 29 or 59 transactions (depending upon your credit limit). your credit card co may contact you while you are buying multiple transactions to verify that it is actually you.

the use of gator simplifies this process.

-- posted by Thruhiker

http://www.heartland.org/education/aug01...

Top 337. Oct 19, 2001 1:44 PM

» Katrina75 - ESA's

Rande, Hi. I am new to the site, this is my first post. Have you heard of ESA's? I will include a link. They seem to have been passed and ready to start funding/using, but I can't find a source. Any thoughts?

Here's a brief portion of the article which explains ESA's: "...President George W. Bush signed the tax-relief bill into law on June 7.

...Bush's tax reform expands tax-advantaged Education Savings Accounts to cover not just the expenses of higher education, but also those associated with public, private, or home schooling of children in kindergarten through grade 12. Moreover, the new law increases the annual limit on contributions to an ESAsometimes called an education IRA--from $500 to $2,000.

Thank you!

-- posted by Katrina75

http://www.savingforcollege.com/

Top 338. Oct 19, 2001 2:27 PM

» Rande - Re: ESA's

In response to message posted by Katrina75:

Katrina,

Yes, the educational IRAs were expanded as part of the 2001 Tax Act. Section 529 plans can be a great alternative.

Here's two really good resources:

http://www.collegesavings.org/yourstate....

Also, from KPMG's "Tax Book":

Prepaid Tuition Programs

The definition of a "qualified tuition program" is expanded to include programs maintained by private educational institutions (in addition to state-sponsored tuition programs), but only for the purpose of allowing individuals to purchase tuition credits or certificates for a designated beneficiary -- i.e., not for the purpose of allowing individuals to make contributions to a savings plan maintained by a private entity.

After 2001, distributions made under a qualified tuition program maintained by a state will be excluded from gross income to the extent they are used to pay "qualified higher education expenses." After 2003, the exclusion from gross income will be extended to distributions from qualified tuition programs maintained by a private entity.

The Act allows tax-free rollovers (or transfers of credits) from one program to another for the same designated beneficiary but limited to one per year, and makes other changes to the rollover rules.

http://www.us.kpmg.com/microsite/taxnews...

-- posted by Rande

:http://www.salon.com/news/feature/2000/0...

Top 339. Oct 19, 2001 3:00 PM

» JeffChristy - Re: Re: ESA's

In response to message posted by Rande:

Rande
You have been asking Bananas if he feels it is alright to be allies with Stalin to fight Hitler. If Hitler was in charge of Germany today and Stalin was in power in Russia we could not support Stalin under current US law. The Leahy amendment passed in 1997 and signed by former president Clinton prohibits giving military aid to countries guilty of human right violations. Just another example of why I have no use for the democrats. I learned about this today from a conversation on fox news.

-- posted by JeffChristy

Top 340. Oct 19, 2001 3:11 PM

» Rande - Re: Re: Re: ESA's

In response to message posted by JeffChristy:

Actually, it was Kirk who asked that particular question, and a good one it is. I do believe we'll be taking a closer look at such self-imposed restrictions that might put us at a disadvantage and making any changes necessary to preserve and protect the country.

-- posted by Rande

http://edworkforce.house.gov/press/press...

Top 341. Oct 19, 2001 3:16 PM

» Katrina75 - Re: Re: ESA's

Thanks for your reply, Rande.

I am interested in the ESA's/Education IRA's for more immediate needs, too. They now cover K-12. We home school grade school aged children. What I would like to know is whether I am understanding it correctly, that we can invest tax deferred dollars, up to $2,000.00 per year, in a qualified plan and withdraw from this fund NOW for educational materials, extra classes, etc. Would this be your reading?

(FYI, California home school comes under the Private School law. So, with or without "bricks and mortar", a home school is treated the same under CA law as any other private school.

I don't want to get my hopes up, but it looks like this is a break we may be able to take advantage of.

This link addresses the K-12 aspects, but not the questions I've posed to you here:

Thanks for your help.

-- posted by Katrina75

http://www.us.kpmg.com/microsite/taxnews...

Top 342. Oct 19, 2001 3:32 PM

» Rande - Re: Re: Re: ESA's

In response to message posted by Katrina75:

Kat,

Yes, the recent tax law not only expanded the educational IRA to allow annual contributions of $2,000 (increased from old $500, still subject to AGI limitations), but also expanded the definition of "qualified education expense" to include K-12 and such things as computers. The new rules take effect after 2001 (beginning in 2002). Here's more:

Education IRAs

Education IRAs are tax-exempt trusts or custodial accounts established to provide tax-free funds to pay qualified education expenses of designated beneficiaries. Effective after 2001, taxpayers may contribute up to $2,000 (increased from $500) per beneficiary to these trusts.

The $2,000 contribution limit is phased out for:

Married taxpayers filing a joint return with AGI between $190,000 and $220,000

All other taxpayers with AGI between $95,000 and $110,000

The Act clarifies that corporations and other entities may make contributions to an education IRA without being subject to any income-limit phase out.

Other changes:

Allow individuals to make contributions until April 15 of the following year

Expand the class of qualified education expenses to include elementary and secondary school expenses, as well as the costs of college and graduate-level courses

Expand the class of qualified education expenses to include the purchase of a computer and related equipment, as well as Internet access and related services

Modify the rule prohibiting contributions after a beneficiary attains age 18 years by providing an exception for students with special needs

Coordinate education IRAs with HOPE and Lifetime Learning credits
___________________

-- posted by Rande

Top 343. Oct 19, 2001 4:04 PM

» Katrina75 - Re: Re: Re: Re: ESA's

WOW! That's a ton of great information. I'm pretty happy about this news. Thanks, Rande.

"Kat"

-- posted by Katrina75

http://www.suite101.com/discussion.cfm/i...

Top 344. Oct 19, 2001 4:20 PM

» JenL_2 - Re: ESA's

In response to message posted by Katrina75:

Hi Katrina - Welcome to the group! You might also want to check out the information and join in the discussion on our "How to Finance a College Education" thread:

You can also use UTMA or UGMA accounts in the child's name to pay for private education, or other expenses for the child, like orthodontics, a car, computer, etc. There are also some tax advantages to UTMA or UGMA accounts....so there are lots of options......Jen

-- posted by JenL_2