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Kiplinger tax editor Joy Taylor answered five reader questions in an Ask the Tax Editor roundup, covering reverse mortgages, 529 plans and study abroad, employer pet insurance, charitable gifts and tax records. The answers are general information; individual tax treatment can depend on the details, and the article advises readers to consult a tax or financial adviser.
Kiplinger tax editor Joy Taylor answered five reader questions in an Ask the Tax Editor roundup published October 30, explaining tax treatment for reverse-mortgage proceeds, 529-plan payments for study abroad, pet insurance, charitable contributions and tax records. The guidance addresses decisions that can affect household borrowing, education spending and deductions, while the publication says its answers are general information rather than individualized tax advice.
Taylor said money received through a reverse mortgage is treated as nontaxable loan proceeds. She also said the interest generally cannot be deducted on Schedule A when the borrower did not use the proceeds to buy, build or substantially improve the home securing the mortgage. That answer distinguishes the tax treatment of the cash received from the separate question of whether interest payments qualify for a deduction.
For a student enrolled at an eligible U.S. college who studies abroad through that school, Taylor said 529 funds may be used if the college accepts the study-abroad credits. A student attending a foreign university for a full degree may also qualify, she said, if that institution participates in the U.S. federal student aid program. Taylor answered another payroll question by saying employer-provided pet insurance is taxable income; employees who pay their share through post-tax deductions are not using pretax wages for the coverage.
On charitable giving, Taylor said cash contributions claimed by itemizers remain subject to a limit of 60% of adjusted gross income, with excess amounts eligible for a five-year carryforward. She also flagged a change starting with 2026 tax returns filed in 2027: itemizers will generally be able to deduct charitable donations only to the extent that total gifts exceed 0.5% of AGI. For records, she recommended generally keeping returns, Forms 1099 and other third-party information returns for at least three years from the return’s due date, while cautioning that some documents may be needed longer.
Tax Rules Affecting Household Choices
The answers address several common financial decisions where tax treatment can differ from cash flow. Reverse-mortgage borrowers may receive funds without treating them as income, but that does not automatically make interest deductible. Families using 529 accounts need to check both the U.S. college’s eligibility and its treatment of study-abroad credits before paying expenses from the account.
The charitable-giving guidance also puts a future filing-year change on donors’ radar. Under Taylor’s description, the 0.5% of AGI floor begins with 2026 returns filed in 2027, so the deduction calculation will differ from the current-year rule. These details may affect how taxpayers plan payments and retain documentation, but the roundup does not evaluate any individual reader’s circumstances.
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Five Questions in a Weekly Tax Column
The development is a reader Q&A roundup, not a new tax ruling or an announcement of legislation. Kiplinger says the Ask the Tax Editor series features Joy Taylor, editor of The Kiplinger Tax Letter, responding to reader-submitted questions. The October 30 edition includes five topics: reverse mortgages, education abroad, pet insurance, charitable deductions and records retention.
In discussing charitable gifts, Taylor attributed the permanent 60%-of-AGI limit for cash contributions to last year’s One Big Beautiful Bill. She separately described the 2026 floor for itemized charitable deductions as a rule that will apply to returns filed in 2027. The article says readers can submit questions through specified Kiplinger publications and notes that submitted questions may be condensed, combined or not published.
“The payments you get from a reverse mortgage are treated as nontaxable loan proceeds.”
— Joy Taylor, Kiplinger tax editor, on reverse mortgages
Individual Tax Outcomes Still Vary
The roundup does not provide the details needed to determine how its answers apply to a particular taxpayer, such as a borrower’s loan terms, a student’s specific school and expenses, or a donor’s full tax situation. Taylor’s response on brokerage records also says retention periods depend on various factors rather than prescribing one period for every statement. The publication’s disclaimer says readers should not act solely on the feature and should consult a tax or financial adviser. Its answers are general guidance, not rulings on individual cases.
Future Questions and 2027 Filings
Kiplinger says it plans to answer more reader questions in future Ask the Editor roundups, including questions about tax changes in the One Big Beautiful Bill and retirement accounts. For readers tracking the charitable-deduction change, the date identified in the report is 2026 tax returns filed in 2027. The publication directs readers to its tax, general-interest and retirement reports for information on submitting questions. No additional government action or implementation detail was announced in this Q&A.
Key Questions
Are reverse-mortgage payments taxable income?
Taylor said reverse-mortgage payments are treated as nontaxable loan proceeds. She said interest generally is not deductible on Schedule A if the proceeds were not used to buy, build or substantially improve the home securing the mortgage.
Can 529 money pay for a study-abroad program?
According to Taylor, it may be eligible when the student is enrolled at a qualifying U.S. college, the program is arranged through that school and the college accepts the study-abroad credits. A foreign university attended for a full degree must participate in the U.S. federal student aid program to qualify, she said.
Is employer-provided pet insurance tax-free?
Taylor said the value of employer-paid pet insurance is taxable income. She also said employees who opt in commonly pay their share through post-tax payroll deductions.
What charitable deduction change did the article describe?
Taylor said a new rule applies to 2026 returns filed in 2027: itemizers may generally deduct charitable donations only to the extent total donations exceed 0.5% of AGI. The roundup also describes a 60%-of-AGI limit for cash gifts and a five-year carryforward for excess contributions.
How long should taxpayers keep tax documents?
Taylor recommended generally retaining returns, Forms 1099 and other third-party information returns for at least three years from the return’s due date. She cautioned that some records may need to be kept longer and that brokerage-statement retention depends on individual factors.
Source: kiplinger.com
