Word: iras
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Regardless of your income, many states allow you to either prepay tomorrow's tuition at today's rates or save in some other tax-favorable education account, for instance one that lets your money grow tax-deferred, much like an IRA...
That's what the government was attempting to give families when it created the Education IRA last year. It was a good idea in theory. In practice, however, it doesn't do much for most families. "I would not recommend that any client save money in an EIRA," concludes Satovsky. Colleges have yet to decide how they'll count that money when determining aid, he reasons. Furthermore, in the year they withdraw from their EIRA, students won't qualify for the other generous programs created by Congress last year: the HOPE scholarship and the Lifetime Learning credit. Nor can money...
...Monday, except that they were wanted in connection with the most bloody terrorist attack in the territory's recent history. The perpetrators of Saturday's car-bomb attack that killed 28 people and wounded 220 are unknown, although police suspect a Republican splinter group that calls itself the Real IRA. But why would they plant a bomb in a mostly Catholic town? And was the most horrific part of the atrocity -- that a misleading telephone warning led people to be standing right at the spot where the explosion took place -- a mistake, or a murderous ploy? Nobody knows...
Start with estate planning. By converting an old IRA to a Roth, you must pay some immediate tax, but you do not have to start withdrawing money after age 70 1/2, as with an old IRA. So you can let it keep growing tax free as long as you live. It might even pay for your heirs to pick up the tax bill on the conversion, if they can afford it and you can't. The savings are that dramatic over long periods of time...
...will be allowed to convert an existing IRA to a Roth, and you can wait until you file your tax return to revert to the old IRA penalty free. That means that if you expect to be just under the income limit, you can convert now without fear of stiff penalties should you find that you miscalculated...