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A 529 plan is a tax-advantaged savings plan designed to help parents or grandparents cover the costs of their child’s or grandchild’s education. ... If you withdraw the money for non-qualified ...
The IRS refers to the plans as qualified tuition plans or section 529 plans. ... And as long as they use the money for qualified education expenses, their withdrawals are tax-free as well.
Withdrawals for qualified expenses are tax-free, but non-qualified withdrawals are subject to income tax and a 10% penalty. ... The main attraction of a 529 plan is its tax advantages. However ...
First, contributions to the account grow tax-deferred, and withdrawals are tax-free when used for qualified education expenses such as tuition, fees, room and board, and books at qualified ...
Most plans allow donors to reclaim the funds at any time for their own use. However, if a "non-qualified" withdrawal is made, the earnings portion will be subject to income tax and an additional 10% penalty tax. [citation needed] Third, a 529 plan can provide a convenient, hands-off way to save for college.
After years of investing in your children’s college education, you’re ready to reach into your 529 college savings plan and send your kid off to the best years of his or her life. But while ...
A 529 college savings plan, also known as a qualified tuition plan (QTP), is one of the best choices for meeting student educational expenses. Two of the 529 plan’s best features are tax ...
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 ...
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