(GCC: Taxes and college tuition are 2 of the greatest expenses parents will face. But what if there was a tax hack that could reduce the cost of both? Today’s guest post shares the details… Read on!)
Hi Go Curry Cracker readers! I’m Kim from The Frugal Engineers. We are a family of three retiring in our thirties in Wyoming, and I’m here to talk tax hacking for college!
Over the last nine years of running our own engineering businesses, we’ve been tracking various tax optimization strategies. One of our favorite tax hacks is using our health savings account for college funds. By lowering our tax burden and maximizing our eligibility for college financial aid, we’re able to retire earlier and enjoy more time with our daughter. This post details part of our overall strategy for college planning in early retirement.
We max out our health savings account (HSA) each year that we’re eligible based on our health insurance. For a family of three in 2019 with a qualifying high deductible health insurance plan, that’s $7,000 a year. We pay cash for any medical, dental and vision expenses that we incur right now and save the receipts for reimbursement during the college years.
In fact, I refer to medical receipts as “future college tuition vouchers” in our house.