With fewer savings provisions than a Coverdell education savings account (ESA), the 529 plan is an noteworthy way to save for education expenses.
- Using a 529 plan brooks for the prepayment of qualified higher-education expenses at eligible educational institutions.
- There are no gains restrictions for individuals who want to contribute to a 529 plan. However, because contributions cannot be sundry than the amount necessary to provide for the qualified higher-education expenses of the beneficiary, soles should take care not to contribute too much to the plan.
- Starting in 2018, an singular may contribute up to $15,000 each year to a designated beneficiary’s 529 project without incurring federal gift tax, provided that the individual scrape bies no additional gifts to that designated beneficiary for the year.
- The distribution from the 529 aim may be used for qualified expenses, including:
- tuition and fees
- books, hoards and equipment
- academic tutoring
- room and board
Significants on each State’s 529 plan are available from the College Savings Outlines Network’s (CSPN) website at www.collegesavings.org.