Dear Liz: Our daughter took on substantial student loan debt to get her master’s degree. She owes about $60,000 and so far has only been able to work a minimum wage job.
If my wife and I were to pay off the loans, would there be any tax advantages or other benefits we could use to offset the expense?
Answer: You won’t get a deduction for paying your daughter’s student loans and you’ll need to be mindful of gift tax rules, but that shouldn’t deter you from this generous act if you can afford to help.
Education debt is the norm for today’s college graduates, but a Gallup poll found the majority say their student loans caused them to delay at least one major life milestone such as buying a home, starting a business, getting married or having kids. Borrowers often forgo saving for retirement in their attempts to pay down debt, losing years or even decades of compounding and diminishing their future wealth. Student loan debt also can create mental health burdens, leading to more depression, anxiety and a reduced quality of life.
The annual gift tax exemption allows you to give up to a certain amount annually to any recipient without having to file a gift tax return. In 2026, the limit is $19,000 per recipient, so you and your wife could give $38,000 this year toward paying down your daughter’s student loans. The exemption probably will be the same or slightly higher next year, allowing you to completely pay off the loans without having to file a gift tax return.
If you wanted to pay the whole bill in one go, you’d have to file the return but you’d be unlikely to pay any gift taxes. Gift taxes are only owed once the amounts you give away above the annual exemption exceed your lifetime estate and gift tax exemption, which for 2026 is $15 million.
Dear Liz: When my mother passed away nine years ago, I inherited some gold coins. At the time, it was difficult to go through her life’s belongings and part with things. Now that gold prices are so high, I’m wondering if it makes sense to sell those coins? I’m not sure holding on to them makes a lot of sense, but would appreciate any advice you might have.
Answer: Gold coins can be a good hedge against inflation as well as a portable source of wealth. But you need to store them securely to guard against theft and they probably should be insured, which can raise the costs of ownership.
If you want to turn your coins into cash, make sure to get at least three quotes from different sources such as reputable coin shops and jewelers. Also discuss the sale in advance with your tax pro. The difference between the value of the coins when you inherited them and their sale price would be considered a capital gain. Gold coins are taxed as collectibles, which means they’re subject to a 28% federal capital gains tax rate.
Dear Liz: My question is regarding spousal Social Security. My husband and I have been married for close to 20 years. My husband’s first wife has never remarried. Could she be claiming my husband’s Social Security? If so, without us knowing it? And, how will that affect my Social Security when that time comes? Should mine be less than my husband’s, will I be able to claim my husband’s Social Security?
Answer: Strictly speaking, no one can claim anyone else’s Social Security. But someone can claim benefits based on the earnings record of a spouse or a former spouse under certain circumstances.
Specifically, your husband’s ex could claim a divorced spousal benefit based on your husband’s record, if that amount was greater than her own retirement benefit and the marriage lasted at least 10 years. She could receive up to half the amount he had earned as of his full retirement age. He does not need to be receiving his own benefit for her to receive a divorced spousal benefit, as long as he’s at least 62. He typically would not be notified that she had applied.
Claiming such a benefit doesn’t affect the amount your husband gets or that you might be entitled to. Your spousal benefit would also be up to 50% of the amount your husband had earned as of his full retirement age. For you to get a spousal benefit, however, your husband must have applied for his own benefit.
Liz Weston, Certified Financial Planner, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.
The post Is there a tax break for paying a child’s student loans? appeared first on Los Angeles Times.
