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I am 21 years old and I am planning to attend a state university next fall. I want to know if there is a way to put money away, possibly in some kind of an IRA, in order to avoid paying tax on it, if I am going to use the money to pay for my education. Also, I would like to know if you do in fact get taxed on the money that you use for your own education, and if so, are there any ways to get around it? What would be the best way for me to solve my problem?
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<< I am 21 years old and I am planning to attend a state university next fall. I want to know if there is a way to put money away, possibly in some kind of an IRA, in order to avoid paying tax on it, if I am going to use the money to pay for my education. Also, I would like to know if you do in fact get taxed on the money that you use for your own education, and if so, are there any ways to get around it? What would be the best way for me to solve my problem? >>

It's too late for you to take advantage of the methods of providing tax-free income to pay for higher education. There is no general exemption for funds used to pay for college.

There are education credits that you may benefit from. You can check them out in the Credits and Deductions section of the FAQ and in IRS Publcation 970.

TMF ExRO
Phil Marti
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