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Archive for January, 2017

Qualified College Expenses

January 5th, 2017 at 04:35 am

I've been crunching numbers.

I plan to claim the American Opportunity Tax credit on our taxes this year. We can claim qualified expenses. Those include tuition, fees, and required course materials, such as books, supplies and equipment. I think I'm also going to claim the money my daughter paid piano accompanists. It was required for the grade to perform with one.

The maximum we can claim is $4000, which as it turns out is just about what we paid. My number crunching came up with $4,102!

Now we did pay more out of pocket for unqualified expenses such as room and board. We just can't claim those. But I have used my daughter's Educational Savings account for most of that expense in 2016. By being able to claim the full $4000 in qualified expenses, we actually get a $2,500 benefit on our taxes.

My current estimate is that we will receive a tax refund of $1500 this season. I don't need too many tax forms to file this year, so I hope to file at the very beginning of February, so that I might have that money to pay tuition on February 12. I can cover it if the refund doesn't arrive prior to that.

I remembered that next year when I file for 2017 we can no longer claim a child tax credit for our youngest daughter. She turns 17 in 2017. The child tax credit is only for those children ages 16 or younger at the end of the tax year.

Retirement Milestone Today

January 4th, 2017 at 05:19 pm

We reached a retirement milestone today. The total of all of our retirement accounts combined equal $400,134.76. I was hoping for this by the end of 2016, but four days after works just fine for me!

I can't wait to see $450,000 next which I expect could easily be this year. Getting closer to half a million. It does add up fast after that first $100K. I checked and we reached that milestone back in November 2009.


January 4th, 2017 at 04:34 am

I'm a bit undecided on our financial goals this year. I know we will continue to invest for retirement. I'm looking into how and if I want to adjust anything. Part of this includes running through our taxes. The free online tax software I used last year for the military won't be available until Monday, January 16th.

I will also continue our youngest daughter's college savings. We started investing earlier for her, so she has a bit more accumulated. She turns 17 in 2017 so I will no longer get the child tax credit for her. Another part of my planning.

I want to continue to avoid student loans for my daughter in college. The bill in February will be the biggest outlay this year. I'm using some of her Educational Savings Account. The remainder, over $5K, will come from our bank account. We have savings, so will use that, but I'm trying to get most of it from current income before it is due. Right now I only have a little over $1K accumulated. I think I can get close to another $2K by the end of January. I also will put any tax refund towards the bill. I just may not have that in time to make the payment on February 12.

I was thinking this would be the year we would get a family vacation in, but it is starting to look like my husband will be at some out of town classes this summer. I do think we plan to visit colleges in the spring, and that will involve airfare and a hotel night or two. As soon as I save for tuition, I will save and pay for airfare. Honestly, I expect airfare for daughter's spring break in March and then again to come home in May. That will add up!

Once we are to summer, I may be looking at some tuition for my daughter to take a couple online courses. I can use her ESA funds for these or part of these. Once we get to Fall we are finally going to start using the Post 911 GI Bill benefits. The tuition and fees are covered in full. There is also payment for books, $500 a semester, and housing ($1062/mo, prorated). The housing payment doesn't cover our entire costs, we will likely need to pay about $1500 out of pocket. This is something I can easily pay from current cash flow at the time.

So I'm thinking about what we need to accomplish, I just don't have it nailed down specifically yet. I will get there though!

Ima Saver

January 2nd, 2017 at 06:08 am

It's been awhile since we have heard from Ima Saver (Julie) here on Saving Advice. She last posted on July 21st of 2015. Several of us have left comments over the months since.

I'm a bit worried! Anyone have another way of contacting her?

2016 Retirement Wrap Up

January 1st, 2017 at 07:27 am

Our retirement investing is on auto pilot. My husband saves 10% of his base pay (this is pay that does not include our housing allowance). We also each max out our Roth IRAs for a total of $11,000 a year. Our total retirement investment for 2016 was $20,032.04.

The total balance in our retirement accounts at the end of 2015 was $330,739.99. We ended 2016 with a total balance of $392,814.02. A difference of $62,074.03. More than two thirds of that increase was growth!

I wish the market had done well enough for us to see $400K. We were really close at one point, but the market fluctuates. We will get there!

Our retirement savings rate is 17.45% of our income. I often bump this up every year by 1%. I'm pretty sure I will do it again this year, too. I'm also contemplating changing from Roth IRAs to Traditional. We are in the 15% tax bracket so the savings would be $1650 in taxes. I guess I figure this is money we could put toward college expenses that are happening now. I have a little over two weeks to decide (the auto investment happens around the 18th of the month for our Roth IRAs).

Are you increasing your retirement savings in 2017?

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