understanding the value of 529s

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Post on 06-May-2015



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Looking to start saving for your children's college? The 529 savings plan is a great place to start. Take a look as we give you the tax benefits of this plan as well as some tips for getting set up.


  • 1.529s Understanding the value of

2. The 529 college-savings plan has existed for nearly two decades, yet many families still arent using it. 3. 10 % In fact, less than of families actively saving for college used a 529 or Coverdell plan. *GAO.gov, A Small Percentage of Families Save in 529 Plans, Dec. 12, 2012. 4. A 529 has many compelling benefits 5. Investment gains and withdrawals are federal tax-free if the savings are used toward qualified higher educational expenses. 6. Many states also provide tax breaks for 529 contributions. 7. Use the following tips and information to make the most of the 529 8. Comparison shop1 9. Every state manages at least one 529 plan, and each plan has different rules. You can invest in a plan from any state. Considerations include a plans investment menu, contribution limits and other rules. 10. offer a tax deduction to residents who invest in their plans. A side-by-side comparison of 529 plans is available on SavingforCollege.com. 34states 11. Understand gifting rules for annual contributions2 12. Contributions to a childs or grandchilds 529 plan are treated as gifts under federal gifting rules. Individuals can give up to $14,000 in 2014 ($28,000 per couple) without filing a gift-tax return. 13. Its best to open a 529 when a child is younger and make annual contributions instead of waiting until the child nears college age and then contributing a larger sum. 14. Special one-time, prorated gift3 15. Under special provisions for 529s, an individual can make a one-time $70,000 contribution to a 529 plan ($140,000 for married couples) and prorate it over five years without gift- tax consequences. 16. Transferring 529 funds4 17. 529s are also flexibile. If your original beneficiary doesnt use all the savings, you can transfer the savings to another member of your family and keep the tax-free growth and withdrawal benefits. 18. You can also save them for future generations or use the money on your own higher education expenses. 19. To learn more about A 529, visit Regions.com/MyGreenGuide This information is general in nature and is provided for educational purposes only. Regions makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented. Information provided should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Regions encourages you to consult a professional for advice applicable to your specific situation.