how to calculate college contribution for the following clients Clients information Martin & Kathleen Martin's Age
Question:
how to calculate college contribution for the following clients
Clients information
Martin & Kathleen
Martin's Age 58, plans to retire at age 68
Salary $150,000 with expected 4% raise per year
Wife's name Kathleen: Age 45 Plans to retire at age 68
Salary: $75,000 with expected pay increase of 2% Annually
They have the following children:
Jon age 16, Sarah age 14, and Randall Age 10.
Average Federal tax rate percentage: 10.54 %
Average state tax rate percentage: 4.23 %
Martin and Kathleen would like to pay about half of the college education for Jon and Sarah. They do not anticipate Randall going to college as he has special needs.
They estimate this will currently cost $12,500 per year for each child - based on $25,000 current tuition. Tuition inflation is expected at 6%. They currently have not save any money for their children's college contribution fund.
Calculate the monthly contribution and show step by step how calculations were done.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill