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Big changes for Coverdell college accounts if Bush cuts expire...will this affect your family? Do you think these change will increase tax revenue or simply make it harder for parents to save for college.

I received a letter from my bank notifying me of the changes beginning Jan 1 if the tax cuts are allowed to expire.

From the letter:
-Maximum annual contribution decreases from $2000 to $500
-The "marriage penalty" will be reinstated by decreasing the joint return contribution phase-out threshold from $190,000 to $150,000 and the singe return phase-out range from $30,000 to $10,000
Elementary and secondary (K-12) education expenses will no longer be treated as qualified education expenses
Tax credits (such as HOPE and Lifetime Learning) can no longer be taken or made in the same year as Coverdell tax-free distributions
-For 2011 contributions, the deadline will be accelerated from April 15 to Dec 31
-The extension of time for penalty-free distribution of excess contributions will be eliminated.

 
yourspecialkid

Asked by yourspecialkid at 9:29 PM on Nov. 14, 2010 in Politics & Current Events

Level 35 (74,634 Credits)
This question is closed.
Answers (10)
  • YSK, I think that those changes will make is much more difficult for parents to save for their children's college education.

    I worked very hard for my college degree. While I believe that my children should work for their degrees, I worked too hard, often jeopardizing study time for the jobs I had to have to pay the bills (fwiw, I attended a state school, not a private school). I graduated with a good GPA, but it could have been better if I had been able to study more. I don't want that level of stress for them. So, we are saving for their education and are expecting them to study and work for scholarships, as well.

    But, these changes will devestate many families, I'm sure.
    May-20

    Answer by May-20 at 6:32 AM on Nov. 15, 2010

  • Gerpie, you are one of the most bitter, hateful people on here. If that is happy, I will choose misery. It may not be as bad.
    Carpy

    Answer by Carpy at 5:37 AM on Nov. 15, 2010

  • We made a family decision many years ago to not buy the grandchildren a lot of toys at birthdays and Christmas, but instead to contribute to their college funds. This will be very upsetting to those of us who try to save so that these children get an education. I had to work very hard for mine, as did my children, who are working very hard, living frugally, and paying back their loans. My daughter-in-law worked two jobs all through college because her parents weren't able to help her, and had a very difficult time. I would like to make it a bit easier for my grandchildren, so they can concentrate on their studies.
    Kerp, you need to find out what you're talking about before you start ranting.
    SweetLuci

    Answer by SweetLuci at 9:09 AM on Nov. 15, 2010

  • gert you really should get out more. I worked and paid my way through school. It was very hard to do. Today's responsible parents put money back so their kids can have at least part of the money they need for school.

    Coverdell's are college savings accounts. We have been putting money into them for years. My boys often get $ for a gift and at least half of it goes in the fund. A college education is one of the best things we can give our kids. All of the money in the accounts is deposited under federal guidelines and parents had been able to use these funds to pay for private school or in our case a special pre-school for our special needs child.

    There is no tax DEDUCTION involved here. Parents will simply have less incentive and fewer options available to them where their kids college education is concerned.

    Anyhoo, don't wory about it because it doesn't affect you directly.
    yourspecialkid

    Comment by yourspecialkid (original poster) at 12:13 AM on Nov. 15, 2010

  • Kerp you mean the rest of us pay taxes? From what you have wrote in other posts you don't make enough to pay much so this doesn't affect you so you don't care. Sour puss.
    Anonymous

    Answer by Anonymous at 1:07 AM on Nov. 15, 2010

  • Thank you ladies. It will make it harder for people to save for their kid's college expenses...$500 a year doesn't go very far.

    I don't expect to be rewarded for planning for my childrens future...but I also don't appreciate having my own govt hamper my efforts.
    yourspecialkid

    Comment by yourspecialkid (original poster) at 9:54 AM on Nov. 15, 2010

  • This admin seems to be screwing with a lot of stuff education wise. Makes me wonder what they have to gain from keeping people uneducated.
    lovinangels

    Answer by lovinangels at 11:21 AM on Nov. 15, 2010

  • Kerp you mean the rest of us pay taxes? From what you have wrote in other posts you don't make enough to pay much so this doesn't affect you so you don't care. Sour puss.

    Answer by Anonymous 34 minutes ago
    .--------------------------
    I pay. I amsorry to blow your theory out of the water ....I pay. And if the mortgage interest credit goes away,I will pay even more. DOn't feel too sorry for yourself....I pay,you pay,we all pay.
    WHat is WRONG with you?WHy is it that I cannot post a reply,and have a comment or opinion without you Harassing me?What did I ever do to you? Nothing.
    kerp1960

    Answer by kerp1960 at 1:45 AM on Nov. 15, 2010

  • You know what? I really think that you are jealous because I am happy,because I have a great family and I am healthy and have no complaints.
    Nw leave me alone. I intend to BE happy.
    kerp1960

    Answer by kerp1960 at 1:50 AM on Nov. 15, 2010

  • – collapse
    Our three kids didn't get a free ride to college, they worked and got Student Loans and Grants. We helped a bit but we didn't pay 100% of their college costs. They valued their education,knowing they were working for it.
    Why would anyone be all hyper about this Coverdale issue? If an education is what your kids want, they will figure out a way to get it.
    AND, since when can parents ever claim education expenses for school? That is only for home schoolers.
    How can the contry afford NOT to raise taxes or at least let Bushs's tax cuts expire? There is no free lunch,even though so many think there is.
    We pay taxes.....that's life,get used to it.If you don't like it, move. But other countries taxes are higher! :-)
    kerp1960

    Answer by kerp1960 at 11:40 PM on Nov. 14, 2010 (hidden) + expand