529 COLLEGE SAVINGS PLANS
supplies), contributions grow federal tax-free and will not be taxed when the money is withdrawn.
ALTHOUGH EACH STATE MAY HAVE THEIR OWN VARIATION OF THE SAME PLAN, ALL 529 PLANS SHARE BASIC GUIDELINES.
Many states also offer tax breaks for 529 plan contributions in the form of income tax deductions to residents.
Contributions to the plan do not have to be reported on federal tax returns, simplifying your tax reporting, and deposits up to $15,000 per beneficiary per year will qualify for the annual gift tax exclusion. Account owners can even combine five years worth of annual gift tax exclusions and could thus contribute $75,000 per donor for any beneficiary in year one. * This allows the donor to remove more assets, and therefore growth, out of their estate, and begin growing them tax-deferred or tax-free sooner for the beneficiary.
The named beneficiary has no legal rights on the funds,
* A gift tax return may be required. Consult your tax advisor.
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