Can you pay the deposit in full?

Discussion in 'Military Academy - USMA' started by EmeraldFalchion, Apr 30, 2013.

  1. EmeraldFalchion

    EmeraldFalchion Prospective

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    Hello everyone,

    I just received all my information on the portal about everything I have to do before R-day. I was wondering if you're allowed to pay the full $11,800 up front so it's not taken out of your pay over the years, instead of just the $2,000 that's required.

    Thanks!
     
  2. teach4purpose

    teach4purpose Member

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    As far as I know, no. It is designed to be paid this way for a reason, that is why everyone does it the same way. And honestly how is it beneficial to plop down a whole bunch of cash like that?
     
  3. pointguard

    pointguard Member

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    West Point

    requires almost 12K to be paid, to/for what? Do the others, I've not seen a SA asking for a Deposit from other posters. Thank you.
     
  4. BigBear

    BigBear Class of 2015

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    You will not have access to the money that is taken out of your pay regardless of whether you pay 12k or 2k - Everyone gets paid the same $225 a month as a plebe. Later on down the road, you would theoretically have more top-off available, but there is no advantage to be gained there.
     
  5. 845something

    845something Member

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    If you had an extra $10k laying around, don't you think you could get a better return on it somewhere else?
     
  6. EmeraldFalchion

    EmeraldFalchion Prospective

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    The only reason I asked is because my family has an education fund set aside for me, and apparently if we withdraw the money for any purpose other than education we have to pay a lot of extra taxes on it. So it just made more sense to us to use it to pay the full deposit so we don't lose that extra tax money.

    I don't care whether or not I would have access to more of my pay; I was just wondering if anyone knows whether it's possible to pay it all or not.

    Thank you to everyone who already responded, but does anyone have a more concrete answer?
     
  7. USMATx2017

    USMATx2017 Member

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    I feel like you should call admissions tomorrow and speak to them directly to find out about this. If they cannot help you, they will certainly direct you to someone who can.
     
  8. GoArmyBeatNavy

    GoArmyBeatNavy Member

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    I recommend that you contact the USMA treasurer about that.

    Questions may be addressed to the
    Treasurer, USMA at (845) 938-4262, or write the Treasurer,
    USMA, Offi cial Mail and Distribution Center, 646 Swift
    Road, West Point, NY 10996-1905.
     
  9. GoArmyBeatNavy

    GoArmyBeatNavy Member

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  10. KateMac

    KateMac Member

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    "if we withdraw the money for any purpose other than education we have to pay a lot of extra taxes on it. So it just made more sense to us to use it to pay the full deposit so we don't lose that extra tax money."

    Theoretically, you are correct. However, there is an allowance made for those attending a Service Academy so you do are not penalized (taxed) f you do attend a SA. Check with your accountant, as he/she should be able to find that information for you somewhere. This applies only to SA students, and is one small way that the taxing body rewards you for serving your country.
     
  11. pointguard

    pointguard Member

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    Sorry GoArmy,

    do all SA's require parents to put up the first $2K to fund the students account to handle expenses before their pay kicks in? Thank you.
     
  12. hmza

    hmza Member

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    Yes, every New Cadet Candidate must have this deposited by June 15 (for class of 2017). There is an option to pay in installments but must be fully funded by 6/15.
     
  13. Stealth_81

    Stealth_81 Super Moderator Moderator Founding Member

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    USAFA does not. You have no outlay of money before entering.

    Stealth_81
     
  14. hmza

    hmza Member

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    College Savings account

    I have a 529 college savings account for my DS and I am allowed to take the $2000 from his account without incurring the 10% withdrawal penalty but I would have to claim the gains on that amount as other income on my taxes. SAs are not eligible institutions since no tuition, room or board is charged. Best advice is for fund owner to contact managing financial institution.
    529's do allow funds owner to transfer to another family member and that is what I will eventually do.
     
  15. another13mom

    another13mom Member

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    USMA recognizes that some appointees may not be able to afford the $2000 upfront and will make arrangements to withdraw the amount from monthly pay over the 4 years, reducing monthly pay by $20 or so.
     
  16. GoArmyBeatNavy

    GoArmyBeatNavy Member

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    No problem, I am sure you were writing fast. It was an important question so I wanted to be clear. As was stated, no appointed candidate will be prevented from entering West Point for not paying the deposit. They will just see less every month in their stipend. The deposit helps offset those initial costs and allows the cadet some spending money each month.
     
  17. EmeraldFalchion

    EmeraldFalchion Prospective

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    Thank you very much for all your answers; I'll talk to the accountant and see what we can do.
     
  18. mat722

    mat722 New Member

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    IRS Pub 970 (Chapter 8) discusses the Qualified Tuition Program (QTP), also called 529 Plan. In short, non-qualified (or taxable) distributions for designated benificiaries attending federal service academies are exempt from the 10% tax penalty. You may have to pay tax on the gain, but not the 10% penalty. The 529 custodian for your account can also explain.
    Withdrawing some or all now, waiting, or rolling it over to another 529 plan are all possible options to consider, and your actions should be dictated by your personal financial situation. We are in similar shoes, but I plan to gradually withdraw funds from our DS's 529 plan over the next 4 years, as no guarantee he will complete the program. In other words, Mom will have to wait for her new kitchen!
    I am not a tax accountant, so don't take my advice as gospel. I recommend checking with your fund custodian.
     

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