How small business owners can save on college

Small business owners with college-bound children can save thousands of dollars a year if they plan ahead and adopt a few simple strategies. While it’s best to plan when children are young, even some last-minute tips can cut parents’ costs. Here are some items business people should put on their to-do lists, and a few steps to avoid.

  • Hold assets in your business account during the college years
  • Convert a sole proprietorship to an S Corp to shelter non-retirement assets, saving thousands under FAFSA guidelines
  • Restructure your business entity to reduce adjusted gross income
  • Consider hiring your spouse and/or children
  • Don’t save in a student’s name
  • Don’t pay for college with a grandparent-owned 529
  • Don’t use or borrow retirement funds
  • Don’t miss out on key tax deductions & credits
  • Learn the different methodologies for calculating the EFC
  • Learn how to use the award appeals process
  • Start early
  • Become acquainted with EFC reduction strategies

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