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Saving for education through a 529 plan is one way to help lower the burden of borrowing money through federal or private student loans. If you plan on paying for your own or someone else’s ...
A final advantage of the assets in a 529 plan is that, although they can be reclaimed by the donor (subject to income tax and the 10% additional penalty on any gains), the assets are not counted as part of the donor's gross estate for estate tax purposes. Thus 529 plans can be used as an estate planning tool to move assets outside of the estate ...
Tax Benefits of 529 Plans. 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 ...
Tax-free growth for education. A 529 plan gives you a tax-advantaged way to save for education. ... Now a 529 plan can be used to pay off up to $10,000 in the beneficiary’s student loans as well ...
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.
Plus, it may come with some tax benefits. Many 529 plans let you deduct contributions from your state income taxes, plus the growth and withdrawals are tax-free when used for qualifying education ...