Divorce: BIG Expense Savings in Tax Deductions

Expenses associated with your child/children's education and health are costs that need to be considered when divorcing. Many states require that parents pay for college education as part of their responsibility post divorce. Each state also has requirements related to the medical care of minors.

Likewise, if you have an elderly parent whose medical costs are or might become your responsibility those costs need to be included in your thinking. Thinking about these expenses in the context of their eligibility for tax deductions can save you money.

Here are some facts:

1.In order to qualify, your child must attend college at least half-time.

2.Room, board, and medical insurance all qualify for deduction. Dorm fees, books, supplies, and ancillary expenses do not.

3. As an individual you can contribute anywhere between $13,000 to $65,000 in one year which can then be spread out over a 5 year distribution schedule. If you contribute less than  $65000 you can continue to contribute money within the 5 year period until you have reached the $65,000  limit.

4.Any earnings in an account grow on a tax-deferred basis and are federal (and possibly state) income-tax-free upon withdrawal as long as the withdrawn amounts are used for qualified higher education expenses,

        Be sure to check all ideas with your lawyer and accountant.

Divorce Information Now" is an ongoing column where readers can submit questions about divorce in the comment stream and we will respond in subsequent blogs.We also post articles of interest written by experts in  the field of divorce that are interesting and informative. Find us at  http://www.divorceinformationnow.com/.