GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 23 Oct 2018, 15:41

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Anyone know about using IRA to pay off grad school tuition?

  new topic post reply Update application status  
Author Message
Intern
Intern
avatar
B
Joined: 30 Dec 2016
Posts: 21
Anyone know about using IRA to pay off grad school tuition?  [#permalink]

Show Tags

New post 18 Mar 2018, 08:01
Hey all,

So it seems that you are allowed to use money in an IRA (not a 401k though) to pay off higher education tuition and avoid the 10% penalty.

You would obviously still have to pay taxes BUT, I'm wondering if you decide to use the IRA money as a grad student, with no income, wouldn't your tax bracket be very low? So my essential question is, would it be wise to use say 30k from my IRA to pay b-school tuition since I would avoid the 10% penalty and not be taxed as high as a grad student?

I'm sure my logic/knowledge falls apart somewhere, so I'm just hoping someone can enlighten me.

Thank you!
Board of Directors
User avatar
P
Joined: 17 Jul 2014
Posts: 2653
Location: United States (IL)
Concentration: Finance, Economics
GMAT 1: 650 Q49 V30
GPA: 3.92
WE: General Management (Transportation)
GMAT ToolKit User Premium Member Reviews Badge
Anyone know about using IRA to pay off grad school tuition?  [#permalink]

Show Tags

New post 19 Mar 2018, 15:42
Actually, using your IRA to pay your Tuition can be a good idea. You avoid paying the 10% penalty, and in addition, if you have 0 income, you basically can pay 0 in taxes.
Note that the new, 2018, tax bracket for single is 10% for income up to $9,525, while your standard deduction would be $12,000. I would assume that you would be able to take up to 12k out of your IRA account and pay off your tuition. In the same time, if you do not have any other income, you would avoid paying both taxes and penalties.
Nonetheless, I would rather suggest checking with a tax professional.

I found a good article about it
https://www.usnews.com/education/best-c ... or-tuition
GMAT Club Bot
Anyone know about using IRA to pay off grad school tuition? &nbs [#permalink] 19 Mar 2018, 15:42
Display posts from previous: Sort by

Anyone know about using IRA to pay off grad school tuition?

  new topic post reply Update application status  


Copyright

GMAT Club MBA Forum Home| About| Terms and Conditions and Privacy Policy| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.