PODCAST: Tax Breaks for College Finance with Kalman Chany

Subscribe FREE wherever you listen:

Apple Podcasts | Google Podcasts | Spotify | Overcast | RSS

Links mentioned in this episode:

• USPS to Raise Rates for "Holiday" Season Again
• Paying for College, 2023: Everything You Need to Maximize Financial Aid and Afford College
• Tax Breaks to Help You Pay for College
• IRS Publication 970: Tax Benefits for Education

Transcript:

David Muhlbaum: Paying for college as tuition and other expenses continue to rise is a challenge for many families. Paying for college is a huge, complicated topic as well. So, today, we’re going to focus on a way we can be helpful, which is pointing out the tax breaks that can ease this financial burden, whether college is something you’re saving for in the future, paying tuition bills on right now, or still carrying debt from. We’re going to get some expert help from Kalman Chany, author of The Princeton Review’s Paying for College. Also, a quick look at postal rates for the holiday season. All coming up in this episode of Your Money’s Worth. Stick around. Welcome to Your Money’s Worth. I’m kiplinger.com senior editor David Muhlbaum joined by my co-host, senior editor Sandy Block. How are you doing, Sandy?

Sandy Block: I’m great. I’m headed for the pool soon to enjoy this sunny August weather.

David Muhlbaum: Well, good for you. Enjoy the dog days. As far as I’m concerned, summer is over. Not by the calendar, I understand that, but a week or so ago, I saw something that to me indicates there’s a fork stuck in summer: Mums for sale at the hardware store.

Sandy Block: Oh, that’s your marker? I used to use back-to-school sales, but now those start in May or June, and that’s just ridiculous, but I actually have seen displays of Halloween candy at the Safeway.

David Muhlbaum: Yeah. There was a rumor that there was going to be a candy shortage, but no, that didn’t pan out.

Sandy Block: I’m not seeing it.

David Muhlbaum: ... no. Well, okay. I got another one for us. The United States Postal Service has filed for a holiday rate increase for package shipping.

Sandy Block:

Right. Because they can’t just run off and change their rates like UPS or FedEx. They have to get approval from the Postal Regulatory Commission or something like that. But what’s that got to do with summer ending?

David Muhlbaum: Well, two things really. Number one that they said peak holiday season in August, which I guess I find triggering, but also the range of what they consider holiday season. These increases will go into effect between October 2nd and January 20th, 2023.

Sandy Block: Okay. So, I guess the four-month holiday season.

David Muhlbaum: Yeah. What holidays are we including here?

Sandy Block: Yeah. Guy Fawkes Day? I don’t know. But, well, it seems excessive, but I guess the postal service is still a little shell-shocked from the volume they had to manage in the first couple of years of the pandemic. They’ve done this surge pricing before, right?

David Muhlbaum: Yeah, you’re right. This would be the third year. But what’s different this year, besides the actual amounts of the increase, is that period we were just talking about. They’re tacking on almost a whole month. The surge used to end on December 26th, Boxing Day.

Sandy Block: Right. I guess even if you mail your packages after the holidays, you still get hammered. You mentioned the rates, but what are they?

David Muhlbaum: Okay. It’s not a percentage thing that we can shorthand and, notably, this doesn’t have anything to do with the cost of a first-class stamp, which is what used to get people all in a lather. As is always the case, there are different rates charged to commercial shippers and retail shippers like you and me. But one that I found relatable is for flat-rate Priority Mail, which is what I tend to use, they provide the box or envelope, you fill it, weight doesn’t matter. It’s pretty convenient. But starting October 3rd, those costs will be almost a dollar more each, 95 cents.

Sandy Block: Wow. That seems like a lot. How does that compare with last year’s surge?

David Muhlbaum: Okay. I have that. Last year, that one in particular for the Priority Mail was 75 cents. But, hey, that was in 2021 dollars. Yeah. Ain’t inflation fun?

Sandy Block: Yes, it is. Unless you’re buying eggs and gas. So, the money-saving tip here, because we need one, because we’re Kiplingers and we’re actionable, is: Mail extra early for the holidays. Have your packages in the mail by October 2nd?

You’re killing summer. Please, go swim. Okay. Coming up next, we get way deep into college finance