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Essentially, it lets families transfer unused 529 plan funds into a Roth IRA. It's a great way to jump-start retirement savings while also saving yourself from a costly tax penalty.
Starting in 2024, unused 529 funds can be rolled into a Roth IRA tax-free, thanks to the SECURE 2.0 Act, giving families more flexibility with college savings.
State. Tax Treatment of 529 Plan Contributions. California. No deduction or credit. Illinois. Maximum deduction of $10,000 ($20,000 for married joint filers) per year
The 529 plan has two major types: a prepaid tuition plan and an education savings plan. ... Other contribution rules apply, too, based on the state. Tax-free withdrawals for qualified education ...
The 529 education savings plan is getting a lot more interesting in 2024. Starting this year, unused money in a 529 plan can be converted into a Roth IRA, eliminating one of the major defects in ...
Savers may also exceed the IRS gift tax exclusion, creating tax implications, though it won’t be an issue for most people. ... beneficiary’s 529 plan. These state-imposed caps range from ...
Through a 529 Rollover, the funds from a 529 plan transition into a Roth IRA, a tax-free individual retirement account. This strategy capitalizes on benefits from both types of accounts.
When selecting a 529 plan, you can choose between an education savings plan and a prepaid tuition plan. The best option depends on several factors, including your financial needs and preferences ...
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related to: transfer 529 prepaid to another state tax implications rules