You already know that the costs of attending a college or university (or even a trade school) continue to rise rapidly. Fortunately, there are more ways to save and invest for college than ever before (529s, Coverdale ESAs, state TAP programs, UTMA and UGMAs, and so forth). There are also two federal programs: the Hope Scholarship and the Lifetime Learning Credit. We have access to numerous 529 plans from which to choose, and we can help you sort out which combination of these plans and other options is right for you.

Grandparents, you have a unique opportunity to make large gifts (up to $65,000 per person in a single year, $130,000 per couple), which can also help with your estate planning. We understand all of the details and can help you determine which strategies make the most sense for you.

Pennsylvania Residents: You can now contribute up to $13,000 annually, per beneficiary/child, per taxpayer, to any state's 529 Plan and get a PA state income tax deduction. This change is retroactive to January 1, 2006. While each taxpayer (husband and wife) must have at least $13,000 of taxable income in order to claim the whole $13,000 deduction (a total of $26,000 if both taxpayers contribute and have enough taxable income), this is a nice tax benefit that was not available in the past.

Update: The ability to make qualified withdrawals from a 529 plan and avoid federal income tax on the investment gains, which was scheduled to “sunset” at the end of 2010, has been permanently repealed by Congress. Now, investment gains related to qualified withdrawals are both federal and PA state income tax free.