Warning: session_start() [function.session-start]: open(/home/content/79/5337879/tmp/sess_fuk08q88ar0tr8i6u8lomnqhh7, O_RDWR) failed: No such file or directory (2) in /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php on line 5

Warning: session_start() [function.session-start]: Cannot send session cookie - headers already sent by (output started at /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php:5) in /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php on line 5

Warning: session_start() [function.session-start]: Cannot send session cache limiter - headers already sent (output started at /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php:5) in /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php on line 5
stock options for college Archives - Help with mergers & acquisitions, raising capital, creating stock options and other equity plans

Posts Tagged ‘stock options for college’

Funding College with Stock Options

Will you stock options lead to a degree?

Getting a college education is not an easy feat, especially now with the price of college tuition on the climb every semester. Most parents pay for college either with money from a savings account or they take out a bank loan. In both cases the money that you’re investing in your child’s higher education will put you in debt or wipe you clean. Have you thought of using stock options to pay for college?

There is a possibility of paying for college with restricted stock, employee stock options, employee stock purchase plans and other grants. This can directly relate to your ability to keep your retirement savings untouched. But first things  first, understanding the Kiddie Tax. Established in 1986, this tax is imposed on children up to 17 years of age. If the child has an income that is more than an annually set threshold, the rest of the money is taxed at the guardian’s tax rate. This law was put in place so that guardians would not give their children large amounts of money in the form of stock options as a ‘gift’. This was done to stop a loophole that otherwise would allow adults to exercise an option and be taxed in a much lower tax bracket.

In 2006, due to the TIPRA Act  (Tax Increase Prevention and Reconciliation Act), the ages stated in the Kiddie Tax were changed and extended to children under 19 and full time college students under the age of 24.

So what else is there to know? How about the three tax credits? They are the American Opportunity Credit, the Lifetime Learning Tax Credit and the Hope Scholarship Credit. According to Troy Onink, the best type of credit a parent or guardian should choose is the American Opportunity Tax Credit. This is because of the first $2000 of tuition expenses that qualify, the amount of credit equals 100%. Plus,  25% of the next paid expenses of $2000. This makes it the best because it credits $2500 a year per each qualified student. That’s compared to the Lifetime Learning Tax Credit, which is $2000, and the Hope Scholarship Credit, which is only $1800.

There you have it, now you’ll be able to send your children to college and be able to keep funding your retirement plan. It can all be done with the use of stock options when funding your children’s higher education. If you have any questions about stock options or what strategies you can use, give us a call.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

Image Credit: NazarethCollege

Free Consultation
Follow Theresa
Archived Newsletters

Warning: Unknown: open(/home/content/79/5337879/tmp/sess_fuk08q88ar0tr8i6u8lomnqhh7, O_RDWR) failed: No such file or directory (2) in Unknown on line 0

Warning: Unknown: Failed to write session data (files). Please verify that the current setting of session.save_path is correct () in Unknown on line 0