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Anthony J. Bardi
Registered Representative
Enrolled Agent, LTC# 454
Tax and Financial Solutions, Inc.
151 SE 223rd Avenue
Gresham, OR 97030
Phone: 503-666-7909
May/June 2020
529 Plan College Savings Plans
Coverdell Education Savings Accounts (ESAs)* and 529 plans** can help lower the cost barrier to college for many students.
A 529 plan lets you prepay for a specific institution or contribute to an account that pays for a student’s qualified education expenses at any postsecondary institution. States establish their own 529 savings plans, each with their own contribution limits (which can be high), while eligible educational institutions can establish prepaid plans.
Potential earnings in a 529 plan grow tax-deferred and qualified distributions are tax-free. While contributions aren’t federally tax-deductible, some states may allow a deduction, and there are no income restrictions.
Anyone can contribute up to $15,000 per individual and $30,000 per married couple filing jointly per year to a 529 plan, free of federal gift tax. You can also bunch contributions into one year up to the maximum of $75,000, but then you can’t contribute anything else in the subsequent four years.
* https://www.irs.gov/pub/irs-pdf/p970.pdf
**Certain requirements may apply. Before investing, consider the investment objectives, risks, charges and expenses associated with 529 plans. Read the program offering statement before investing. 529 plans are not guaranteed by any state or federal agency. Consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Discuss 529 tax rules with your tax professional.
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Tax and Financial Solutions, Inc. and LTM Client Marketing are unrelated companies. This newsletter was created by LTM Client Marketing and was not written or created by the named financial professional and does not necessarily represent the views and opinions of Avantax Wealth Management® or its subsidiaries.
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