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Beneficiaries reap the largest tax benefits of 529 plans. The money contributed on their behalf grows tax-free. And as long as they use the money for qualified education expenses, their ...
The earnings portion of money withdrawn from a 529 plan that is not spent on eligible expenses (or rolled over into an ABLE account for any eligible family member) is subject to income tax, an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 ...
A 529 plan is a tax-advantaged way for parents to save for their children’s education expenses. The IRS doesn’t impose a contribution limit on 529 plans, unlike for other tax-advantaged ...
A 529 plan allows a participant to set up a tax-advantaged account to allow a beneficiary to use the funds for qualified education expenses. The participant deposits after-tax money into the account.
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.
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 ...
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