How to Open a 529 College Savings Plan
Before you can pick the best 529 savings plan it is probably a good idea to understand what type of savings vehicle you are working with and how it can benefit you. Basically, a 529 savings plan is a tax advantaged savings plan designed to offer tax benefits when the funds are used for college education (Possible tax deductions on contributions and tax free growth and withdrawals when used for qualified educational expenses). The plan gets it’s name from section 529 of the Internal Revenue Code. Two flavors: Prepaid and Savings. Contributors to a 529 savings plan can choose between a prepaid and a savings plan. With the prepaid plan, tuition credits can be purchased now with current rates and used in the future. This strategy if based on the concept that due to inflation, you will get a better price today than you will several years from now. However, many of these plans are limited only to the state or educational institution in which they are purchased, which limits your child’s choi
Related Questions
- If a distribution check was sent directly to a higher education institution from a 529 College Savings Plan account, will a 1099-Q be sent?
- How can I get information about Fidelity Electronic Funds Transfer transactions in brokerage and college savings plan accounts?
- How does The State Farm ® College Savings Plan sponsored by the State of Nebraska work?
