Tax Benefits for Higher Education

Brian SingletonBlog, Watch Your Wallet

Many tax benefits are available to help you pay higher education costs, whether for your children or yourself. Let’s take a look at what’s available and how you can take advantage of these benefits to ease the financial burden of paying for education. Coverdell Education Savings Accounts (Section 530 Programs) Starting in 2013, you can contribute up to $2,000 to a Coverdell Education Savings account (a Section 530 program formerly known as an Education IRA) for a child under 18. … Read More

Lending Money? Make it a Tax-Smart Loan

Brian SingletonBlog, Watch Your Wallet

Lending money to a cash-strapped friend or family member is a noble and generous offer that just might make a difference. But before you hand over the cash, you need to plan ahead to avoid tax complications down the road. Let’s say you decide to loan $5,000 to your daughter who’s been out of work for over a year and is having difficulty keeping up with the mortgage payments on her condo. While you may be tempted to charge an … Read More

Is Canceled Debt Taxable?

Brian SingletonBlog, Watch Your Wallet

Generally, debt that is forgiven or canceled by a lender is considered taxable income by the IRS and must be included as income on your tax return. Examples include a debt for which you are personally liable such as mortgage debt, credit card debt, and in some instances, student loan debt. When that debt is forgiven, negotiated down (when you pay less than you owe), or canceled you will receive Form 1099-C, Cancellation of Debt, from your financial institution or … Read More