There’s something unforgettable about watching a child or grandchild take their first steps into a classroom. It marks the start of a new adventure—for them and for you.
As they begin their educational journey, it can also be a good time to consider strengthening your overall financial strategy for the year ahead. Here are a few considerations to support a student while keeping long-term planning in mind.
Give a “Back-to-School Boost” with a 529 Contribution
A 529 plan is one of the most effective ways to save for education. Contributions grow tax-free, and many states offer tax benefits for participating.
You can even front-load up to five years’ worth of contributions at once. This approach can help reduce your taxable estate while giving your child or grandchild a financial head start on future education costs.
Pay Tuition Directly to the School
If you’re ready to help cover tuition, paying the school directly can be a tax-smart move. Payments made this way do not count toward your annual gift limit and are not subject to gift taxes.
Meanwhile, the student’s household may still be able to claim education tax credits, potentially amplifying the benefit.
Align Charitable Giving with Education Goals
Education isn’t just about your own family. You can also create opportunities for others by directing a qualified charitable distribution (QCD) from your IRA to a university foundation or scholarship fund.
A QCD can help:
- Satisfy your required minimum distributions (RMDs)
- Potentially lower your taxable income
- Make a lasting difference in students’ lives
This can be a powerful way to combine generosity with strategic tax planning.
Looking Ahead
Some families act on these strategies as soon as the school year begins, while others prefer to wait until a tuition bill or tax question arises. Either way, multiple approaches are available, and the right choice depends on your unique situation and timing.
If you’d like to explore additional smart tax strategies before year-end, review the attached guide or consider scheduling a complimentary appointment to evaluate which strategies fit your broader goals.
Planning today can help support both education and your financial future.
Investing involves risk, including possible loss of principal. No investment strategy can ensure financial success or protect against losses. This information is being provided only as a general source of information and is not intended to be the primary basis for investment decisions. It should not be construed as advice designed to meet the particular needs of an individual situation. Please seek the guidance of a financial professional regarding your particular financial concerns. Consult with your tax advisor or attorney regarding specific tax issues. We do not provide tax or legal advice or services. Always consult with qualified tax and legal advisors concerning your own circumstances. We are not affiliated with or endorsed by any government agency, and do not provide tax or legal advice or services.
