Tax Breaks to Help You Pay for College
It’s often said that buying a house is the largest investment most of us will ever make. But if you have a couple of children, the cost of sending them to a four-year college could exceed even that big-ticket item. Three kids—or at least one with Ivy League aspirations? That’s a house and a vacation home.
The average annual cost of tuition, room and board for a four-year in-state public college in 2021 was $22,690 a year, while the average annual cost of a four-year private school was $51,690, according to the College Board. But for Ivy League and many selective private colleges, the annual cost is more than $75,000. Fortunately, just as the government provides tax incentives for home buyers, the tax code includes a lot of credits and deductions designed to lower the cost of college.
Save Tax-Free With a 529 Plan
The most effective way to save for college is to start contributing to a while your child is still in diapers.
