Giving money to parents to pay for loans on my education

[ypark22]

What is the name of your state (only U.S. law)? New Jersey

Hello, I am 21 years old and about to graduate college. My parents have taken out a large sum of federal PLUS loans for my education, and I would like to give them some money that I made over the summer to help pay off these loans. The amount in question is about $5,000, and I know that my parents are able to receive paid interest exemption on their federal loan. Is there any way for me to give my parents this amount without having to include it in my personal income tax return, and are there any other rules I need to keep in mind for my parents and myself when filling taxes?

Bottom line: How can my family and I pay the least amount of taxes on $5,000 that will be used towards my education?

 

[Just Blue]

What is the name of your state (only U.S. law)? New Jersey

Hello, I am 21 years old and about to graduate college. My parents have taken out a large sum of federal PLUS loans for my education, and I would like to give them some money that I made over the summer to help pay off these loans. The amount in question is about $5,000, and I know that my parents are able to receive paid interest exemption on their federal loan. Is there any way for me to give my parents this amount without having to include it in my personal income tax return, and are there any other rules I need to keep in mind for my parents and myself when filling taxes?

Bottom line: How can my family and I pay the least amount of taxes on $5,000 that will be used towards my education?

I would suggest you seek the advice of a CPA. Although that will likely cost about as much as the tax on 5k.

 

[LdiJ]

What is the name of your state (only U.S. law)? New Jersey

Hello, I am 21 years old and about to graduate college. My parents have taken out a large sum of federal PLUS loans for my education, and I would like to give them some money that I made over the summer to help pay off these loans. The amount in question is about $5,000, and I know that my parents are able to receive paid interest exemption on their federal loan. Is there any way for me to give my parents this amount without having to include it in my personal income tax return, and are there any other rules I need to keep in mind for my parents and myself when filling taxes?

Bottom line: How can my family and I pay the least amount of taxes on $5,000 that will be used towards my education?

Is that 5k the sum total of money that you have/will earn in 2014? If so, you will not end up paying any tax on it as you will have not earned enough money for federal income tax to apply. You will have to include it on your personal return.

Also, if that is the sum total of money that you earned you will still be your parent's dependent for 2014 and they also may be eligible to take an education credit for you.

 

[davew128]

I would suggest you seek the advice of a CPA. Although that will likely cost about as much as the tax on 5k.

I would suggest he/she spend 10 seconds googling their gross misconception rather than wasting a CPA's time.