What can a 529 be used for? More than you may think

What constitutes a qualified educational expense? When that question relates to 529 savings plans, the answer may be broader than you think.

Although 529 accounts are often used to pay for children’s college tuition, those funds can also be used for a variety of qualified expenses. In fact, recent changes to federal law under the Tax Cuts and Jobs Act of 2017 have given investors additional options for how they can spend their 529 plan dollars.

Earnings in 529 plans aren’t taxed under the federal tax code, withdrawals for eligible expenses are tax-free and many states also allow 529 contributions to be deducted from state income taxes. Since the plans are state-sponsored, they differ from state to state with respect to investment options and other features.

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Written By: Capital Ideas Editorial Team

Published By: www.thecapitalideas.com

June 7, 2018 In: Current Affairs, Financial Articles Comments (None)