Section 529 College Savings Plan
Recent tax law changes have created provisions for tax-advantaged college savings plans. The new legislation was codified under section 529 of the Internal Revenue Code. The following are the highlights of the 529 College Savings Plan:
-A 529 savings account can be set up for the benefit of a beneficiary such as a child, grandchild, niece or nephew;
-While contributions to the 529 Plan are not deductible, Earnings and withdrawals for qualified higher education expenses are free from federal taxation;
-Contributions can be made for up to $11,000 ($22,000 for married couples) for each beneficiary. Under a special election, a total of $55,000 ($110,000 for married couples) can be contributed at one time by accelerating 5 years’ worth of investments;
-Withdrawals for expenses other than qualified higher education are subject to a 10% IRS penalty on earnings;
-There are no age or income limitations for the
beneficiary or the contributing party.
HAVE A CPA ON YOUR SIDE!
Call Us for Additional Information at (310)444-3041