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Plus, 529 savings plan contributions can be invested, similar to the structure of a 401(k), and any investment profits used to pay for qualified education expenses are 100% tax-free.
The earnings portion of money withdrawn from a 529 plan that is not spent on eligible expenses (or rolled over into an ABLE account for any eligible family member) is subject to income tax, an additional 10% federal tax penalty, and the possibility of a recapture of any state tax deductions or credits taken. For example, if $50,000 is ...
Originally designed for college expenses, 529 plans can now be used for K-12 tuition at private schools and apprenticeship programs. Funding a 529 plan may have immediate tax benefits in some cases.
That law also permits 529 plans to be used for qualified apprenticeship expenses. Bottom line A 529 college savings plan offers one of the best vehicles to save for a child’s educational costs ...
So if you have $4,000 or more in qualified expenses, you can get the full $2,500 tax credit. ... Personal living expenses. Sports or activity fees. ... A 529 plan can help you save up for college ...
An ABLE account, also known as a 529 ABLE or 529A account, is a state-run savings program for eligible people with disabilities in the United States. Rules governing ABLE accounts are codified in Internal Revenue Code section 529A, which was enacted by the Achieving a Better Life Experience (ABLE) Act in 2014.