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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.
The earnings portion of money withdrawn from a 529 plan that is not spent on eligible expenses (or rolled over into an ABLE account for any eligible family member) is subject to income tax, an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 ...
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 ...
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 ...
A 529 plan, also called a qualified tuition plan, ... If you’re unable to use the money for qualified expenses or roll it over to a Roth IRA, you may have to withdraw the money. In that case ...
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 ...