LLC & college saving

Forum|Forum|4 years ago
June 8, 2022
1 reply
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I just started an LLC.

1. I am the only employee. Would I have to file individual taxes and business taxes? If I do have to file two different taxes how would I document the income?

2. Would it be better to use a TurboTax program for the above situation or face to face with an expert?

3. I’ve started saving for my kids college education. I am using the path to college offered by my state how would I document that on my taxes?

Hal_Al

Level 15

Q. I’ve started saving for my kids college education. I am using the path to college offered by my state how would I document that on my taxes?

A. There is no federal deduction for making a contribution to a 529 plan. Some states allow a deduction on the state return. If your state is one, it will come up in the state interview; usually in the "Here's how (your state) handles income differently" section. For Indiana it’s at credits and taxes. Scroll down and select Indiana CollegeChoice 529 Plan.

For a state list of eligible plans, see: https://www.savingforcollege.com/529-plan-details

http://www.savingforcollege.com/compare_529_plans/index.php?page=compare_plan_questions&plan_question_ids[]=437&order_by=plan_question_437

The federal tax break comes in the future, when you take the money out to pay for education. All earnings (interest, dividends and capital gains) over the years is tax free if the distribution is used to pay for education, including room & board.