FPQP Education Planning

Question 1

Which of the following accounts offers a tax-free growth and tax-free withdrawal benefit specifically for qualified education expenses?

Accepted Answer

529 Plan

Answer

Traditional IRA

Answer

UGMA Account

Answer

Coverdell ESA

Question 2

A Coverdell Education Savings Account (ESA) allows annual contributions up to:

Accepted Answer

$2,000 per beneficiary

Answer

$500 per beneficiary

Answer

$1,000 per beneficiary

Answer

$5,000 per beneficiary

Question 3

Which of the following is NOT a qualified education expense for a 529 plan?

Accepted Answer

Transportation to campus

Answer

Tuition and fees

Answer

Room and board

Answer

Required textbooks

Question 4

The American Opportunity Tax Credit (AOTC) provides a maximum annual credit of:

Accepted Answer

$2,500

Answer

$1,000

Answer

$1,500

Answer

$2,000

Question 5

Under the SECURE 2.0 Act, unused 529 plan funds can be rolled over to which type of account after 15 years?

Accepted Answer

Roth IRA

Answer

Traditional IRA

Answer

Health Savings Account

Answer

403(b) plan

Question 6

The Lifetime Learning Credit (LLC) differs from the AOTC in that the LLC:

Accepted Answer

Is available for an unlimited number of years

Answer

Has a higher income phase-out range

Answer

Provides a 100% credit on all expenses

Answer

Is refundable up to 40%

Question 7

Which financial aid form is required for federal student aid eligibility?

Accepted Answer

FAFSA

Answer

CSS Profile

Answer

IRS Form 8863

Answer

Form 1098-T