Most parents planning for college are familiar with the mainstream ways of saving and paying for college. These include 529 plans, savings accounts and life insurance among other common methods. Awesomely, business owners have a few additional tools in their arsenal. Here are a few ways savvy business owners can save and pay more easily for college.

Hire your child. If your child is working for your business doing legitimate jobs, they can earn money. Good work choices include office cleaning or landscaping. If you have a teenager who is into social media, and what teenager isn't, you can hire them to take care of your social media marketing. I had my nine-year-olds stuffing envelopes, sweeping up and filing paperwork, which these days is scanning into document storage.  All you need is a job description of age appropriate work as backup documentation.  While it is also a good idea for the kids to have some spending money for their efforts, it’s important that the lion’s share could go into a Roth account in their name.

Roth accounts for children. Children with earnings can save into a Roth account and use the money for qualified education costs and avoid the early withdrawal penalty.  While not exclusively for children of business owners, these parents are more likely to create jobs for preteens so they have the opportunity to save. In addition, most colleges do not count the child’s retirement assets for financial aid.

Saving for college with pre-tax money. Since you are paying your child to do real work, the wages are deductible as a business expense. Your child’s lower tax bracket will mean more money will be saved for college.

Continue after college starts. You child will undoubtedly be home holidays and over the Summer. Save projects your child can do for the business to make the best use of your child’s limited availability. Our son, who was a computer engineering student did some programming for us while living on campus.

Become a landlord. If you are entrepreneurially minded and have investment real estate experience, an opportunity would be to buy a house near campus. You can rent to other students to cover much of the mortgage to reduce the living expenses for your son or daughter. Also, the depreciation of the property might lower your income for improving your financial aid prospects.

Financial aid finesse. A few special rules of financial aid are available to small business owners. Generally the value of your business is not part of your assets when calculating financial aid. And where private colleges do count business value, who’s to say what your business is worth? 

Shift your income and expenses. If you and your spouse are at or near the $160,000 joint income, that begins phase out of the valuable education credit. As a business owner you can generally prepay some expenses or delay some of your year-end billings so that you can shift your income to below that level.

There are several ways these strategies interact, change tax rates, or impact financial aid in ways that are beyond what can be expressed here.  As a business owner your main focus is — well, to run your business and care for family.  That’s why a business owner focused advisor who has two sons through college would be a great resource. Call me!

Merra Lee Moffitt, Certified Financial Planner, is a Senior Partner at Good Life Financial Group, Wyomissing. She has college kids, is self -employed and has used many business owner college funding tools herself and lived to tell the tale! She loves helping other people get their kids through college so you can get on with your dreams!  It’s part of her financial planning process. Call, click or contact at 610.628.2055, www.Welcome2TheGoodLife.com/MerraLee and merralee.moffitt@lpl.com.