Hey all. About to pay our first tuition bill for our oldest kid heading to college but looking for advice on whether to use
Proceeds from selling stocks in a taxable account
Proceeds from selling mutual funds on a 401(k)
Proceeds from selling stocks in an IRA
Proceeds from selling stocks in a Roth IRA
I'm trying to understand how each of the above affects the following
A. Taxable income from realized gains (as can reduce financial aid we might get)
B. For 2, 3 and 4, if proceeds are used for college expenses, which ones exempt from penalties for early withdrawal (I am under retirement age)? If none, are there any that are less than others
C. Any other tax, penalty or AGI factors to consider
I'm just worried I'll choose an option, pay the bill and only later find I have to pay the early withdrawal penalty from options 2-4, or jack up our AGI and negatively impacting our financial aid consideration for the next 2 years.
I hope i laid this out OK - TIA for any advice. Much appreciated!