Sullivan & Company - Certified Public Accountants 4709 Montgomery Lane #201 - Bethesda, MD, 20814 Phone: 301-657-8080




Paul Sullivan, CPA

Sullivan & Company


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Feature Articles

- How to Save for College Tax-Free
- Protecting Financial Records from Wild Weather
- Getting a Tax Credit for Your Honey Do Lists

Tax Tips

- 2011 IRS Mileage Rates Changed for July 1, 2011
- Do You Need to Pay Estimated Taxes?
- After I Do - Best Filing Status for Married Couples
- Deducting Your Home Office
- Got a Letter from the IRS? What You Need to Know

QuickBooks Tips

- Protecting Your QuickBooks Data Against Hackers

Financial Planning Tips

- Estate Plan Checkup
- Examine Property Tax Bills
- Budget vs. Actuals
- Investment Review



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client each month, maybe it's time to talk with or switch to Paul

Sullivan at Sullivan & Company CPAs.  To set up an appointment to

talk with Paul at 800-652-6521 or in Bethesda call 301-657-8080.

How to Save for College Tax-Free


College tuition and fees are on the rise. Shockingly, the cost for 4-year private schools now tops $36,000 per year on average.


But the investment is well worth it. According to the U.S. Census Bureau, individuals with a bachelor's degree earn more than double those with just a high school diploma.


The two most popular college savings programs are 529 plans and Coverdell Education Savings Accounts. Whichever you choose, be sure to start when your child is young. The sooner you begin, the less money you will have to put away each year.


Example: Suppose you have one child, age six months, and you estimate that you'll need $120,000 to finance his college education 18 years from now. If you start putting away money immediately, you'll need to save $3,500 per year for 18 years (assuming an after-tax return of 7%). On the other hand, if you put off saving until your son is six years old, you'll have to save almost double that amount every year for twelve years.


Financial Calculator: College Savings Planner

Use this calculator to help develop and fine-tune your child's college education savings plan.


How Much Will College Cost?


Based on the survey completed for the 2010 Trends in College Pricing, the average cost for tuition, fees, and room and board for 2010-11 was:


    $16,140 per year for 4-year public (in state) colleges and universities.

    This is an increase of 6.1% from 2009-10 findings.


    $36,993 per year for 4-year private colleges and universities.

    This is an increase of 4.3% from 2009-10 findings.


It should be noted that, on average, full-time students receive $16,000 of financial aid per year in the form of grants and tax benefits for private 4-year institutions, $6,100/yr for public 4-year institutions, and $3,400/yr for public 2-year institutions.


Saving with 529 Qualified Tuition Plans


Section 529 plans, also known as Qualified Tuition Programs, ar the best choice for many families.


Every state now has a program allowing persons to prepay for future higher education, with tax relief. There are two basic plan types, with many variations:


1) The Prepaid Education Arrangement. You essentially buy future education at today's costs, by buying education credits or certificates. This is the older type of program, and it tends to limit the student's choice of schools within the state.


2) Education Savings Accounts. You contribute to an account earmarked for future higher education.


TIP: When approaching state programs, one must distinguish between what the federal tax law allows and what an individual state's program may impose.


You may open a Section 529 plan in any state. But when buying prepaid tuition credits (less popular than savings accounts), you often need to apply the credits to a specific college or group of colleges.


To read the rest of this article, click here or go to and click on the Newsletter section.


If you have any questions about 529 Qualified Pension Plans or Coverdell Education Savings Accounts, please give us a call at 301-657-8080.



As always you can call our offices if you have any questions about these or any other accounting, tax, financial planning or insurance related issues, at 301-657-8080. 


Regards, Paul Sullivan, CPA

President, Sullivan & Company





Sullivan & Company, CPAs | 4709 Montgomery Lane | Bethesda, Md. 20814 | email:

Direct: 240-316-3531 | Main no.: 301-657-8080 Ext 102 | Fax: 301-657-9055