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The two types of 529 plans include: An education savings plan that allows you to open an investment account that can be used for future education expenses, including tuition, room and board, books ...
You can use funds from your 529 plan to pay for qualified education expenses at eligible institutions nationwide. Withdrawals for qualified expenses are tax-free, but non-qualified withdrawals are ...
The average cost of tuition and fees at four-year private colleges and universities has grown from $34,970 for the 1994-1995 school year to $58,600 for 2024-2025, according to CollegeBoard.
Contributions to 529 college savings plans are made with after-tax dollars. Once money is invested in the account, it grows tax-free, and withdrawals from the plans are not taxed when the money is used for qualified educational expenses. [2] Only 2.5 percent of all families had 529 college savings accounts in 2013. [3]
Key takeaways. 529 plans are tax-advantaged accounts that allow a beneficiary to use the funds for qualified education expenses. Funds contributed to a 529 plan are allowed to grow tax-deferred.
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 ...
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