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Post by Deleted on Jun 21, 2020 10:44:10 GMT -5
Loan rates are 2.75% on Stafford loans. But really the rate doesn't mean much if they're getting paid off within 6 months of graduation on a subsidized. Believe it or not, I'm still on the fence on this one as well, although I'm leaning towards for sure doing the first two years. He can only take $3500 the first year and $4500 the second so it would be the same as just using the 529 minus the $80 origination fee.
eta: I always assume 5 years in the back of my head, so I'm not super concerned about that. I'll feel a lot better after this first year when I see how my son adapts to college, but right now he's the variable that worries me the most!
I understand that concern completely. The main concern I would have at a state school is the ability to get the class you need at the time you need it. One of mine was an out of state student at a state school. He and one other friend were the only ones to graduate in 4 years out of his group, and the friend was also from elsewhere. I would have a major concern about course selection and availability given what state budgets look like, especially in such a specialized area as engineering. Cutting non-tenured faculty can put a huge hole n the curriculum. It doesn’t matter to most Public schools if you don’t graduate in 4 years. Also, I would make sure the advising is adequate. One reason my son’s friend didn’t graduate on time is that the didn’t get enough direction on what they needed to do to get a degree. Just more things to keep in mind. Depending on the type of student your son is, of course I'm not too worried about our flagship financially. They have a massive endowment and lots of money in reserves. They could weather a pretty severe crisis.
But, I hear you about the advising. I'm already questioning it a little with his first classes. In order to finish in 4 he needs to "double-dip" on his general eds so they all count towards 2 categories...which would have him taking 4 general eds total. He registered for a class that double dipped, but one of the categories is physical science which he will be taking a ton of as part of his major. It made zero sense to me for him to take that one with hundreds of other options (and with a lab to boot that he doesn't need), but his advisor gave it the thumbs up and my son doesn't want to change it. So, right out of the gate he's committed himself to have to take one extra class he wouldn't have had to. I'm probably going to encourage taking a class or two in the summers at our local university which will be an expense not expected, but cheaper than an added year away.
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Deleted
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Post by Deleted on Jun 21, 2020 10:54:51 GMT -5
Ironically, I'm thinking of having him take out the subsidized loans. I can pay up to 10K of student loans off with 529 funds as a qualified expense and he has quite a bit in an UTMA that can be used for anything. I was thinking about this option the other day - I don't know what all grants/scholarships/529 college money you have lined up to pay the college expenses, but do you have $4k annually planned to pay from your pocket (that is, not the others I mentioned) to be eligible for AOTC? Loan proceeds would count as "from your pocket". My kids always had loans as part of their aid packages, in addition to grants and scholarships, but no 529 money. Every year we do this tax song and dance where the child claims some part of their scholarships as taxable income on their tax return, so that at least $4k of tuition is "paid for" not by scholarships/grants but other $, presumably loan $ (but it's all fungible). Normally the default is to assume scholarships/grants are used for tuition first (which makes those $ nontaxable), and R & B second (which makes those $ taxable). Usually we could fit the taxable scholarship income inside the standard deduction, so it wasn't taxable federally (or much), but it usually did incur state taxes (almost no state standard for dependents). As long as the AOTC credit was greater than the tax cost, we'd do it, and pay for the kid's tax. Unfortunately, for your planned AGI, the AOTC will really only be the $1k refundable portion of the $2.5k max. You probably won't owe any tax due to low taxable and lots of nonrefundable credits you are already getting (like us). Then again, maybe your HOH status affects the numbers differently. It's driving me crazy that I have all these nonrefundable tax credits going to waste (could use them to Roth convert for free) because I'm trying to optimize FAFSA EFC = 0 and EITC. As soon as I'm beyond those windows, and could optimize for Roth conversions, those nonrefundable credits disappear, because they are almost all tied to having children/dependents! Or they are impossible to use (retirement Saver's credit - at 50% credit: the tax < credit, but for incomes where tax > (max)credit: credit rate drops to 20% or less). LOL. I was actually going to tag you in my previous post to pulmonary to ask you if using the 529 to pay off loans would be a loophole in the "double-dipping" rule where you could use 529 money to pay for things AOTC covered because it seems like it would be. It all gets so insanely complicated. Should I move the scholarships to taxable for him so he can claim the credit? Should I let his dad claim him as he would be able to get the full credit? Should I just not bother with it for 2020 at all since Fall semester he probably will only have 2K of AOTC qualified expenses? It's much more likely his final semester would have a lot more expenses and my tax load would be a lot higher in 2024 if I greatly reduced retirement savings. I'd hate to waste one of the 4 years I have to claim it.
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Lizard Queen
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Post by Lizard Queen on Jun 21, 2020 10:56:15 GMT -5
I understand that concern completely. The main concern I would have at a state school is the ability to get the class you need at the time you need it. One of mine was an out of state student at a state school. He and one other friend were the only ones to graduate in 4 years out of his group, and the friend was also from elsewhere. I would have a major concern about course selection and availability given what state budgets look like, especially in such a specialized area as engineering. Cutting non-tenured faculty can put a huge hole n the curriculum. It doesn’t matter to most Public schools if you don’t graduate in 4 years. Also, I would make sure the advising is adequate. One reason my son’s friend didn’t graduate on time is that the didn’t get enough direction on what they needed to do to get a degree. Just more things to keep in mind. Depending on the type of student your son is, of course I'm not too worried about our flagship financially. They have a massive endowment and lots of money in reserves. They could weather a pretty severe crisis.
But, I hear you about the advising. I'm already questioning it a little with his first classes. In order to finish in 4 he needs to "double-dip" on his general eds so they all count towards 2 categories...which would have him taking 4 general eds total. He registered for a class that double dipped, but one of the categories is physical science which he will be taking a ton of as part of his major. It made zero sense to me for him to take that one with hundreds of other options (and with a lab to boot that he doesn't need), but his advisor gave it the thumbs up and my son doesn't want to change it. So, right out of the gate he's committed himself to have to take one extra class he wouldn't have had to. I'm probably going to encourage taking a class or two in the summers at our local university which will be an expense not expected, but cheaper than an added year away.
He shouldn't be afraid to change a class selection like that. After the disaster my advisor put me into my first semester, I always tweaked my classes. Take a look at the other option that would fit into his schedule and see if there are openings. Also, is rate my professor still a thing? Might want to check that out.
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pulmonarymd
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Post by pulmonarymd on Jun 21, 2020 11:03:48 GMT -5
I understand that concern completely. The main concern I would have at a state school is the ability to get the class you need at the time you need it. One of mine was an out of state student at a state school. He and one other friend were the only ones to graduate in 4 years out of his group, and the friend was also from elsewhere. I would have a major concern about course selection and availability given what state budgets look like, especially in such a specialized area as engineering. Cutting non-tenured faculty can put a huge hole n the curriculum. It doesn’t matter to most Public schools if you don’t graduate in 4 years. Also, I would make sure the advising is adequate. One reason my son’s friend didn’t graduate on time is that the didn’t get enough direction on what they needed to do to get a degree. Just more things to keep in mind. Depending on the type of student your son is, of course I'm not too worried about our flagship financially. They have a massive endowment and lots of money in reserves. They could weather a pretty severe crisis.
But, I hear you about the advising. I'm already questioning it a little with his first classes. In order to finish in 4 he needs to "double-dip" on his general eds so they all count towards 2 categories...which would have him taking 4 general eds total. He registered for a class that double dipped, but one of the categories is physical science which he will be taking a ton of as part of his major. It made zero sense to me for him to take that one with hundreds of other options (and with a lab to boot that he doesn't need), but his advisor gave it the thumbs up and my son doesn't want to change it. So, right out of the gate he's committed himself to have to take one extra class he wouldn't have had to. I'm probably going to encourage taking a class or two in the summers at our local university which will be an expense not expected, but cheaper than an added year away.
That is the sort of thing I was talking about. It makes no sense to take extra science courses if you are a science major. He should fulfill other requirements. Plus he doesn’t need more lab time, he will get enough.
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teen persuasion
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Post by teen persuasion on Jun 21, 2020 11:15:37 GMT -5
OMG, it is insanely complicated, and you never know when it might change (retroactively dropping auto EFC = 0 AGI threshold from $32k to $23k, cratering of asset protection numbers from $40k-ish to $6k, switch to prior-prior year tax info...)
When does the school bill for spring semester? DD1's school billed and due date was early December, so both semesters of a school year were paid in one calendar year. Yay for claiming AOTC 4 times cleanly. Boo for paying early, and could opt for claiming LLL credit in first or fifth year (extra year of college tax credit, but much less than AOTC). With you and X, you could get creative and see who benefits more from AOTC, assuming both *could* claim (haven't looked into divorced parent rules at all). Later years better for you, after FAFSA tax years done, and you reduce tax deferred contributions / increase AGI. But also a gamble due to unknowns.
Regarding using the 529 to payoff loans, I'm not sure. They probably haven't thought that one thru yet. But the fungibility of money sources to parts of college bill might make it impossible to pinpoint. No 529 money here, so no research into it. I've heard there's a $10k limit. Also realize getting subsidized vs unsubsidized is much harder than years ago. My older kids got all sub loans initially, but DS4 has mostly unsub loans. Just the most recent dilution of college aid at the federal level.
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Deleted
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Post by Deleted on Jun 21, 2020 11:49:15 GMT -5
I'm not too worried about our flagship financially. They have a massive endowment and lots of money in reserves. They could weather a pretty severe crisis.
But, I hear you about the advising. I'm already questioning it a little with his first classes. In order to finish in 4 he needs to "double-dip" on his general eds so they all count towards 2 categories...which would have him taking 4 general eds total. He registered for a class that double dipped, but one of the categories is physical science which he will be taking a ton of as part of his major. It made zero sense to me for him to take that one with hundreds of other options (and with a lab to boot that he doesn't need), but his advisor gave it the thumbs up and my son doesn't want to change it. So, right out of the gate he's committed himself to have to take one extra class he wouldn't have had to. I'm probably going to encourage taking a class or two in the summers at our local university which will be an expense not expected, but cheaper than an added year away.
He shouldn't be afraid to change a class selection like that. After the disaster my advisor put me into my first semester, I always tweaked my classes. Take a look at the other option that would fit into his schedule and see if there are openings. Also, is rate my professor still a thing? Might want to check that out. When I questioned the class choice he got very defensive and said, "I knew you wouldn't like the class I picked". He said he wants to take the class because it sounds interesting to him and college is supposed to be about exploring his interests which I couldn't really argue with. I said my piece about why I thought it was a bad choice and told him it would mean he'd have to take 7 credits instead of 3 and he didn't seem to care. I don't think it's a good idea to insist he change it. Win the battle, lose the war and all that.... I have him halfway convinced to take a section that does not have lab though. Really, I think the root of it is he doesn't want to bother to contact his advisor and go through the hassle of changing things.
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Deleted
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Post by Deleted on Jun 21, 2020 11:52:30 GMT -5
When does the school bill for spring semester? They bill mid-January, due February 1st.
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Lizard Queen
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Post by Lizard Queen on Jun 21, 2020 12:05:54 GMT -5
He shouldn't be afraid to change a class selection like that. After the disaster my advisor put me into my first semester, I always tweaked my classes. Take a look at the other option that would fit into his schedule and see if there are openings. Also, is rate my professor still a thing? Might want to check that out. When I questioned the class choice he got very defensive and said, "I knew you wouldn't like the class I picked". He said he wants to take the class because it sounds interesting to him and college is supposed to be about exploring his interests which I couldn't really argue with. I said my piece about why I thought it was a bad choice and told him it would mean he'd have to take 7 credits instead of 3 and he didn't seem to care. I don't think it's a good idea to insist he change it. Win the battle, lose the war and all that.... I have him halfway convinced to take a section that does not have lab though. Really, I think the root of it is he doesn't want to bother to contact his advisor and go through the hassle of changing things.
Does he even have to go through his advisor to change classes? I've only been to 3 different colleges, but at all those I could enroll and drop classes on my own, unless instructor permission was required, and then I think I just had to fill out a quick submission for that or something.
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Deleted
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Post by Deleted on Jun 21, 2020 12:20:07 GMT -5
When I questioned the class choice he got very defensive and said, "I knew you wouldn't like the class I picked". He said he wants to take the class because it sounds interesting to him and college is supposed to be about exploring his interests which I couldn't really argue with. I said my piece about why I thought it was a bad choice and told him it would mean he'd have to take 7 credits instead of 3 and he didn't seem to care. I don't think it's a good idea to insist he change it. Win the battle, lose the war and all that.... I have him halfway convinced to take a section that does not have lab though. Really, I think the root of it is he doesn't want to bother to contact his advisor and go through the hassle of changing things.
Does he even have to go through his advisor to change classes? I've only been to 3 different colleges, but at all those I could enroll and drop classes on my own, unless instructor permission was required, and then I think I just had to fill out a quick submission for that or something. I'm not sure. Probably not.
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pulmonarymd
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Post by pulmonarymd on Jun 21, 2020 12:22:50 GMT -5
Does he even have to go through his advisor to change classes? I've only been to 3 different colleges, but at all those I could enroll and drop classes on my own, unless instructor permission was required, and then I think I just had to fill out a quick submission for that or something. I'm not sure. Probably not. He may not be able to change now, but he should be able to do so during drop/ad week. Don’t usually need an advisor’s signature
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Post by Deleted on Jun 21, 2020 12:24:04 GMT -5
With you and X, you could get creative and see who benefits more from AOTC, assuming both *could* claim (haven't looked into divorced parent rules at all). Later years better for you, after FAFSA tax years done, and you reduce tax deferred contributions / increase AGI. But also a gamble due to unknowns. I've been thinking about this too. This is Ex's year to claim DS, but last year I let him claim him too because I got zero benefit from doing so as the $500 non-child credit is non-refundable. He might be able to get the full benefit of the AOTC, but not 100% positive he'd hand it all over to DS. He might...just not sure...I haven't sat down and talked with him about it specifically. So, would I rather have $1000 in my pocket or gamble on $2500? I don't know!
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teen persuasion
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Post by teen persuasion on Jun 21, 2020 12:37:07 GMT -5
With you and X, you could get creative and see who benefits more from AOTC, assuming both *could* claim (haven't looked into divorced parent rules at all). Later years better for you, after FAFSA tax years done, and you reduce tax deferred contributions / increase AGI. But also a gamble due to unknowns. I've been thinking about this too. This is Ex's year to claim DS, but last year I let him claim him too because I got zero benefit from doing so as the $500 non-child credit is non-refundable. He might be able to get the full benefit of the AOTC, but not 100% positive he'd hand it all over to DS. He might...just not sure...I haven't sat down and talked with him about it specifically. So, would I rather have $1000 in my pocket or gamble on $2500? I don't know!
The $500 nonrefundable non-child credit I understand, but what about EITC? Doesn't 1 vs 2 kids have a big drop?
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Deleted
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Post by Deleted on Jun 21, 2020 12:43:30 GMT -5
I've been thinking about this too. This is Ex's year to claim DS, but last year I let him claim him too because I got zero benefit from doing so as the $500 non-child credit is non-refundable. He might be able to get the full benefit of the AOTC, but not 100% positive he'd hand it all over to DS. He might...just not sure...I haven't sat down and talked with him about it specifically. So, would I rather have $1000 in my pocket or gamble on $2500? I don't know!
The $500 nonrefundable non-child credit I understand, but what about EITC? Doesn't 1 vs 2 kids have a big drop? He's still a qualifying person on my return for the EITC even on the years his dad claims him as a dependent. The dependent part can be released to the non-custodial parent with Form 8332, but it doesn't change that he lived with me more than 50% of the time.
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teen persuasion
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Post by teen persuasion on Jun 21, 2020 12:56:24 GMT -5
The $500 nonrefundable non-child credit I understand, but what about EITC? Doesn't 1 vs 2 kids have a big drop? He's still a qualifying person on my return for the EITC even on the years his dad claims him as a dependent. The dependent part can be released to the non-custodial parent with Form 8332, but it doesn't change that he lived with me more than 50% of the time. Nice. Next thought - if ex has stopped paying child support, how does he qualify to claim your son as a dependent via the support test? Aren't you providing all the $ support now?
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Deleted
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Post by Deleted on Jun 21, 2020 13:37:59 GMT -5
He's still a qualifying person on my return for the EITC even on the years his dad claims him as a dependent. The dependent part can be released to the non-custodial parent with Form 8332, but it doesn't change that he lived with me more than 50% of the time. Nice. Next thought - if ex has stopped paying child support, how does he qualify to claim your son as a dependent via the support test? Aren't you providing all the $ support now? The support test rules are different when it's a divorce. You can basically pick and choose. I've also known people that were forced to let the non-custodial claim younger kids even when they were way behind in child support because it was in the decree that they got to claim them every other year. I had it put specifically in mine that he only could if he was current on support. www.irs.gov/pub/irs-pdf/p4449.pdfIt's kind of weird because once DS is in college and getting grants, scholarships and maybe taking out loans and working I'm not REALLY providing half his support either, but apparently all that money is still considered parental...
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Deleted
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Post by Deleted on Jun 21, 2020 13:38:53 GMT -5
Your son reminds me of my daughter, minnesotapaintlady. At her university, they put all the pre-medical fields students into an auditorium and told them that a very small percentage would get in. So what was their back-up plan. They scared her so badly that she registered for classes like German and no science classes whatever. I was like, "Huh?" But she didn't want to annoy the advisor when I insisted she talk with him again. So I did something that parents should never do. I was an adjunct at the university so I strolled over to his office and said, "Would you do me a favor? My daughter forgot she is smart." And then I told him what had happened. She really is smart . . . 32 on the ACT, all A's not only in high school but in college and pharmacy school. And he said he would take care of it and put her in appropriate classes. She actually ended up applying for the PharmD program after only two years. It turned out to be very important that she get her schedule right. I know you can't do this. I probably shouldn't have done it, but I did work there.
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teen persuasion
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Post by teen persuasion on Jun 21, 2020 14:22:30 GMT -5
So you claiming your son as a dependent nets you only the $1k refundable portion of AOTC, but ex claiming him instead could get $3k tax credit ($1 possibly refundable, up to $2k nonrefundable if he owes enough tax). Would he be able to use the nonrefundable portion? Could you make a deal with him over it - point out its only worth $1k to you but $3k to him, he could contribute $3k to "school expenses" (money is fungible) and come out exactly even. Or $2k, and you are doing him a $1k favor. Something like that - he benefits on taxes, and shares the bonus with you/son (because you can't benefit w/o a tax bill, which he has). Another version of my tax song and dance, what has the best benefit for the family as a whole. It only works if everyone agrees, but you are doing him a favor, letting him claim the dependent when you normally should.
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TheOtherMe
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Post by TheOtherMe on Jun 21, 2020 14:28:43 GMT -5
Nice. Next thought - if ex has stopped paying child support, how does he qualify to claim your son as a dependent via the support test? Aren't you providing all the $ support now? The support test rules are different when it's a divorce. You can basically pick and choose. I've also known people that were forced to let the non-custodial claim younger kids even when they were way behind in child support because it was in the decree that they got to claim them every other year. I had it put specifically in mine that he only could if he was current on support. www.irs.gov/pub/irs-pdf/p4449.pdfIt's kind of weird because once DS is in college and getting grants, scholarships and maybe taking out loans and working I'm not REALLY providing half his support either, but apparently all that money is still considered parental... Actually, if it goes to Tax Court IRS rules outweigh what is in a divorce decree. IRS doesn't really care what the decree says. The default is that the custodial parent is presumed to get the exemption as long as the child lived there more than half of the nights during the year. In the case of the people you know who let the non-custodial parent claim the child, the IRS would have ruled in the favor of the custodial parent had both parents claimed the child.
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Post by Deleted on Jun 21, 2020 14:48:12 GMT -5
The support test rules are different when it's a divorce. You can basically pick and choose. I've also known people that were forced to let the non-custodial claim younger kids even when they were way behind in child support because it was in the decree that they got to claim them every other year. I had it put specifically in mine that he only could if he was current on support. www.irs.gov/pub/irs-pdf/p4449.pdfIt's kind of weird because once DS is in college and getting grants, scholarships and maybe taking out loans and working I'm not REALLY providing half his support either, but apparently all that money is still considered parental... Actually, if it goes to Tax Court IRS rules outweigh what is in a divorce decree. IRS doesn't really care what the decree says. The default is that the custodial parent is presumed to get the exemption as long as the child lived there more than half of the nights during the year. In the case of the people you know who let the non-custodial parent claim the child, the IRS would have ruled in the favor of the custodial parent had both parents claimed the child. But, there's nothing wrong with divorced parents picking and choosing either is all I'm saying. As long as the non-custodial fills out the 8332 the IRS doesn't care what the non-custodial provided financially.
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Deleted
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Post by Deleted on Jun 21, 2020 18:34:56 GMT -5
Would he be able to use the nonrefundable portion? Could you make a deal with him over it - point out its only worth $1k to you but $3k to him, he could contribute $3k to "school expenses" I think so, although I'm not totally privy to his income situation anymore, but I'm thinking he still has to make at least what he used to (between 70-80K), but he's married and has two young kids getting the full CTC too, so maybe not. I'm just thinking we will have almost no qualified expenses for 2020 anyhow. If I remember right books and a laptop don't count, just tuition/fees and room and board. A couple of his scholarships are paying 100% Fall semester instead of half Fall half Spring which would bring him to less than 2K we have to pay for Fall.
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teen persuasion
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Post by teen persuasion on Jun 21, 2020 19:05:19 GMT -5
Would he be able to use the nonrefundable portion? Could you make a deal with him over it - point out its only worth $1k to you but $3k to him, he could contribute $3k to "school expenses" I think so, although I'm not totally privy to his income situation anymore, but I'm thinking he still has to make at least what he used to (between 70-80K), but he's married and has two young kids getting the full CTC too, so maybe not. I'm just thinking we will have almost no qualified expenses for 2020 anyhow. If I remember right books and a laptop don't count, just tuition/fees and room and board. A couple of his scholarships are paying 100% Fall semester instead of half Fall half Spring which would bring him to less than 2K we have to pay for Fall. So if he has 2 CTC, that's $1200 nonrefundable, $2800 possibly refundable. Plus $2k nonrefundable other CTC and AOTC, and $1k possibly refundable AOTC. Total $3200 nonrefundable to use/lose. Which needs $30k MFJ taxable income in the lowest 2 brackets, so add standard deduction of ~$25k, plus any pre-tax payroll contributions like HSA or 401k. That's the question, does he max those 2? How/when scholarships and aid are applied to bills is a toss up. I know PELL and NY's tap are applied in parts to each semester, you don't get it all at the start of the year. School scholarships usually seem to be allocated in parts for each semester. Outside organization scholarships could just be a check - those are fuzzier, you just cash/deposit the check and use as needed. I'm not sure they even get reported to schools and on t1098 forms to the IRS. You might need to wait and see what happens, and decide at tax filing time.
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jerseygirl
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Post by jerseygirl on Jun 21, 2020 19:30:15 GMT -5
Seems like parents of college kids go through a math class just trying to determine all of these factors and interactions
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Post by Deleted on Jun 21, 2020 19:50:39 GMT -5
I think so, although I'm not totally privy to his income situation anymore, but I'm thinking he still has to make at least what he used to (between 70-80K), but he's married and has two young kids getting the full CTC too, so maybe not. I'm just thinking we will have almost no qualified expenses for 2020 anyhow. If I remember right books and a laptop don't count, just tuition/fees and room and board. A couple of his scholarships are paying 100% Fall semester instead of half Fall half Spring which would bring him to less than 2K we have to pay for Fall. So if he has 2 CTC, that's $1200 nonrefundable, $2800 possibly refundable. Plus $2k nonrefundable other CTC and AOTC, and $1k possibly refundable AOTC. Total $3200 nonrefundable to use/lose. Which needs $30k MFJ taxable income in the lowest 2 brackets, so add standard deduction of ~$25k, plus any pre-tax payroll contributions like HSA or 401k. That's the question, does he max those 2?How/when scholarships and aid are applied to bills is a toss up. I know PELL and NY's tap are applied in parts to each semester, you don't get it all at the start of the year. School scholarships usually seem to be allocated in parts for each semester. Outside organization scholarships could just be a check - those are fuzzier, you just cash/deposit the check and use as needed. I'm not sure they even get reported to schools and on t1098 forms to the IRS. You might need to wait and see what happens, and decide at tax filing time. I highly doubt it. He doesn't have a HDHP, and back in the day he was always just putting 10% in his 401K. I don't see that he would have increased that with expenses going up the past 10 years and income staying about the same. If anything he reduced it. But again, I don't know for sure. I think waiting to see how it all shakes out with the scholarships and 1098 is a good idea. Technically, ex has the right to claim him in 2020 per the divorce decree anyhow.
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teen persuasion
Senior Member
Joined: Dec 20, 2010 21:58:49 GMT -5
Posts: 4,043
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Post by teen persuasion on Jun 21, 2020 20:32:17 GMT -5
Seems like parents of college kids go through a math class just trying to determine all of these factors and interactions A lot of it you learn the hard way. One year while working thru taxes with one of the kids (figuring out how much we needed the student to claim as taxable scholarship, to max AOTC), another one had a question for a friend. The friend had gotten a big tax bill (taxes done by a parent's tax guy) she wasn't expecting. I think she got hit with the kiddie tax. Her parents were divorced, and each was now remarried. She lived with mom and stepdad (was their dependent), but dad gave her some stock to sell and use the cash for college bills. He must have figured it was a great way to get the LTCG at her nice low tax rate, win-win. Unfortunately, as a dependent in college, she got taxed at mom and stepdad's higher rate, and she got stuck with the tax bill the next spring (when she wasn't expecting it). Way to go, dad!
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Deleted
Joined: Apr 26, 2024 14:24:09 GMT -5
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Post by Deleted on Jun 29, 2020 9:23:41 GMT -5
I wish my crystal ball was working in regards to interest rates. I'm thinking about maybe setting myself a stop-loss limit and saying if my "Child support Reserves" gets below X then I refinance. I just hate to pay nearly 3K in closing costs for insurance. I only have 9K interest left on the entire rest of my current loan.
DS wants to pay for his entire first year himself and he should be able to do that with the subsidized loan and what he has in his personal savings. If class is 100% online and he chose to stay home, they'd be cutting him a sizeable check, financially the best decision, but I think he needs to actually live on campus...for so many reasons. I will still be buying him a laptop this summer. I was going to take it from the money I'll be refunded for his trip, but maybe I'll finally tap the 529 and pocket the trip money. It's HARD to spend that savings though!
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geenamercile
Senior Member
Joined: Dec 17, 2010 16:40:28 GMT -5
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Post by geenamercile on Jun 29, 2020 11:11:35 GMT -5
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Deleted
Joined: Apr 26, 2024 14:24:09 GMT -5
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Post by Deleted on Jun 29, 2020 12:08:57 GMT -5
For the first one you had to have been a student Spring of 2020.
This is what it says about the second one on one college website in our state (I couldn't find anything about it from DS's college):
Our expenses have actually decreased since Covid, so I can't honestly answer yes to any of those questions...I guess except for the "other life situations causing additional stress!"
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Deleted
Joined: Apr 26, 2024 14:24:09 GMT -5
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Post by Deleted on Jul 6, 2020 14:26:52 GMT -5
The end is here! Last child support payment hit my checking account today.
I just went in and stopped the auto contributions to DS's 529 account. THAT was tough to do. I cancelled out of the transaction like 3 times before I finally hit the submit button. I have never missed a single month since he was born...and now it's done. Still got way too much going on in my head right now to make any decisions about refinancing. I over analyze every decision to death and now I'm trying to figure out whether or not to put Carrot in private school this Fall as well. HORRIBLE timing for it I know, but I didn't really plan on this whole pandemic thing. I've been picking up phone calls from all the mortgage lenders now. I had to enter my phone number and email online to get rates and have been ignoring all the phone numbers I didn't recognize, but they were not giving up. So far I'm 3 for 3 of ones that "can't do anything to help me". Yeah, I could have told them that, that's why I wasn't picking up the phone. Once I got their rates for a under 100K loan I didn't want to pursue it further.
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Deleted
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Post by Deleted on Jul 6, 2020 19:28:13 GMT -5
Last thought: would either of your neighbors be interested in buying the back 25% of your land? I'm reading through this thread trying to find a lender recommendation that I thought someone left and saw that I hadn't answered this. Probably no. My neighbors on both sides all died in the past year. On the one side, the kids are living there, but they have no money, rent out the crop land and have actually sold off a large 100+ acre tract recently, on the other side the kids are still doing the estate sale stuff and getting ready to sell. Both places are several hundred acres, so my few more isn't really anything special.
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Deleted
Joined: Apr 26, 2024 14:24:09 GMT -5
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Post by Deleted on Jul 6, 2020 20:26:27 GMT -5
This is the crap I'm finding if they'll underwrite a loan that small at all....those points are over and above all the other closing costs. WAAAY too spendy.
This one is Amerisave.
30 Year Fixed Rate APR Monthly Payment Points 2.875% 3.245% $394 $4,021 3.000% 3.330% $400 $3,538 3.125% 3.432% $407 $3,240 3.250% 3.535% $413 $2,974 3.375% 3.628% $420 $2,581 3.500% 3.728% $427 $2,279 3.625% 3.835% $433 $2,056 3.875% 4.079% $447 $1,956 4.000% 4.180% $454 $1,676 4.125% 4.297% $460 $1,566
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