Get Uncle Sam To Pay $36,000 For Your Childs Education!

Let's assume that you would like to begin saving for your children's education fund. At the end of each year, for the next 8 years, you will contribute $2,000 into a Coverdell Education Savings Account (Education IRA), using your after-tax dollars. The money grows tax-free, and neither the contribution nor the interest is taxed when you make a withdrawal, as long as you use it for education purposes.

By the end of 17 years, your Education IRA will have accumulated to just over $86,000. Contrast this with your fully taxable non-IRA account which would have grown to only $50,000. That is a $36,000 difference!

Today, the average 4-year cost of education at a public college in the country is around $38,000. In 18 years it is projected to be close to $86,000. Costs for private education are even higher.

This example illustrates that, by funding your child's education using an Education IRA earning 14% with after-tax contributions of $2,000 in each of the first 8 years of your child's life, you can put an extra $36,000 into your child's future rather than Uncle Sam's pocket!

There would be enough in the IRA account to pay for the entire projected 4-year education costs.

Now, when your child begins their college education, as you draw from the account each year to pay for expenses, and re-invest the remaining funds, at the end of your child's 4th year of college, an extra $27,000 would remain in the IRA that can be transferred to another child's account.

If you have a fully taxable Non-IRA account, you'd have to come out of pocket in your child's 3rd year of college because the account didn't have enough to cover the entire education cost.

By using a Tax-Free Education IRA account, this allows the contributions to accumulate at a much fast rate than the fully taxable investment vehicle.

Brian Gray is a full time real estate investor and web developer. You can visit his website to learn how to Earn 14% Per Year in your IRA. It is a very safe investment.

In The News:

Taxing the digital economy in Indonesia  International Tax Review
Start-up taxation  BusinessLine

IRS Reports Tax Gap of $300 Billion

The Internal Revenue Service is reporting that the difference between... Read More

Tax Deductions - Mr. C.P.A. Can I Deduct a Pizza? You Too Can Deduct Your Fun By Using Tax Tips

Recently, I stumbled across a concept that could change your... Read More

Small Businesses Filing Amended Federal Tax Returns to Recover Money

Small Businesses Filing Amended Federal Tax Returns to... Read More

Tips and Simple Guidelines on How to Calculate Payroll Taxes

Managing a business small, medium or big requires you to... Read More

Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004?

Someone once remarked, "Next to being shot at and missed,... Read More

Taxing Overseas Firms for SOX Compliance

The Sarbanes-Oxley Act, also called the Public Company Accounting Reform... Read More

What to Do If You Can?t Pay Your Taxes

The end of tax filing extensions is quickly approaching. What... Read More

Tax Time Tune Up

Excerpted from the new book, "How to Do Space Age... Read More

Electronic Commerce Taxation and Pakistan

Assume a buyer in Pakistan downloads software from the Internet... Read More

Failure To Pay Employment Taxes ? Penalties

As an employer, you must pay employment taxes if you... Read More

Tax Jokes and Quotes

Do you realize that some tax forms ask you to... Read More

Tax Reform, My Way

We need real tax reform and we need it now.... Read More

How Likely Are You To Be Audited?

Statistics for IndividualsUnfortunately, the IRS increased its rate of auditing... Read More

Estate Taxes - It Pays to Plan Ahead

Estate taxes. It's not enough to simply know they exist,... Read More

Save Money on Taxes - Is the Only Way to Get Your Tax Savings is to Sleep With an IRS Agent?

Tilting the Tax Laws in Your Favor.In order to accelerate... Read More

Surprising Truths About Tax Preparers

Choosing the right tax preparer for your business is a... Read More

2005 Ford Escape Hybrid Certified For Clean-Fuel Deduction

If you are environmentally conscious and purchase a 2005 Ford... Read More

Save Money on Taxes - Let Uncle Sam Pay for Your Fun!

"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More

Marriage or Divorce ? Check Your Social Security Number

Newlyweds and the recently divorced should make sure that names... Read More

Small Business Tax Credit - Americans with Disabilities Act

Many small businesses complain when confronted with the expense of... Read More

IRS Lock-In Letters ? What?s An Employer To Do?

Employers often ask employees to designate the amount of tax... Read More

Tax Records - What You Should Keep And For How Long

Many taxpayers are confused about how long they should keep... Read More

Euro Tax Haven Threat

Media reporting of a new EU savings tax directive has... Read More

About Income Taxes; Tidbits

1812The first attempt to impose an income tax on America... Read More

Seven Key Tax Deductions for the Self Employed

As a sole proprietor, it's wise to familiarize yourself with... Read More