Paying for College Tuition

One of the best ways to do this is set up a section 529 plan. In 2014, you can contribute up to $70,000 to an account established to pay college expenses for your child or grandchild without any gift tax consequences. The gift is considered made over a 5 year period by the IRS which keeps in within the $14,000 annual gift tax exemption. Georgia also has a very good 529 program, and you can deduct up to $2,000 per beneficiary on the Georgia return if you use the GA 529 plan.

Head of Household Filing Status

The head of household filing status is more favorable than the single status due to lower tax rates on the same level of income. To qualify though you have to meet 4 tests: not married or considered unmarried, pay more than half the cost of keeping up the home, the home has to be the principal residence of your qualifying child or your dependent qualifying relative for more than half the year, and you are a US citizen or resident.

Gifts and Inheritances

In general, everything you receive as a gift or inheritance is not taxable. However, if you receive certain income from an inheritance such as distributions from an IRA, tax deferred annuities, accrued interest and dividends, or US savings bond interest then it is taxable to you. The key is if the deceased would have had to include it in their taxable income if they received it before death then you do too when you inherit it.

Nontaxable Employer Payments

In most cases everything your employer gives you especially cash or its equivalent like gift certificates goes on your W-2 as taxable wages. The following are 11 exceptions which are not taxable:
1. Holiday turkey
2. Coffee and drinks in the break room
3. Cost of up to $50,000 in group term life insurance
4. Up to $5,250 of qualified educational assistance
5. Employee discounts on services/goods sold by the company
6. Qualified employee length of service and safety awards limited to $1,600 in value
7. Value of employer provided athletic facility on premises
8. Meals furnished on employer's premises for its convenience
9. Retirement planning services
10. Qualified adoption assistance up to a certain limit
11. Limited personal use of the company copier