Paying for Med School Strategies

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bgyt
Posts: 116
Joined: Sat Jun 16, 2018 8:20 am

Paying for Med School Strategies

Post by bgyt »

I want to help out our son's Med School by paying for his upcoming year. I'm not very financially literate, so I'm looking to see if there is a way to do this and get some tax benefits or what is the smart way to do this.

One caveat: My wife and I's current income is over the threshold (>$200k) for most of the income tax credits

Is there any benefit in putting it in a 529 for him and then paying it our immediately?

Looking for any opportunities if there are some
Admiral
Posts: 5109
Joined: Mon Oct 27, 2014 12:35 pm

Re: Paying for Med School Strategies

Post by Admiral »

bgyt wrote: Tue Jul 09, 2024 2:12 pm I want to help out our son's Med School by paying for his upcoming year. I'm not very financially literate, so I'm looking to see if there is a way to do this and get some tax benefits or what is the smart way to do this.

One caveat: My wife and I's current income is over the threshold (>$200k) for most of the income tax credits

Is there any benefit in putting it in a 529 for him and then paying it our immediately?

Looking for any opportunities if there are some
Depending on your state--and assuming it allows a state deduction--you can put money into a 529 plan and withdraw it virtually immediately, or at least after one month. Since most schools offer payment plans you could, for example, put $100k into a 529, thus getting the deduction, and then pay it out over several months. Just keep good records.
er999
Posts: 1553
Joined: Wed Nov 05, 2008 10:00 am

Re: Paying for Med School Strategies

Post by er999 »

Have him become an expert on loan forgiveness as (unlike when I had to borrow) many only have to pay back a small fraction of their loans. It might be better for him to borrow and you give him the money to do something else.

Much info on whitecoatinvestor. See for example https://www.whitecoatinvestor.com/save- ... residents/
aum
Posts: 211
Joined: Wed Jan 30, 2013 1:27 pm

Re: Paying for Med School Strategies

Post by aum »

Parent of a recent Dr here and potentially two more on the way. Check if your state has 529 deduction - NJ has $10K. Even if you have money let your kid take a loan. Once he finishes Med School, consolidate and enroll for PSLF and get on SAVE plan. You will pay almost zero in interest for first two years and then 10% of (agi - 225% FPL) so again bare min interest while he is doing residency.

Invest the money you otherwise would have paid for your kid’s education and help him pay loan when he finishes residency. If PSLF doesnt work out for whatever reason I dont think I would have problem with my Kid paying 10% of his attending physician’s salary.

I had my daughter take $42K of stafford student per year and rest like room and board plus some misc expenses from her 529 plan.
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