The AICPA Tax Advisor recently published the article below detailing the various benefits of a 529 college savings plan and looking at other investment accounts for education funding.  A few benefits are bulleted here, with the article going into more detail.

• Contributions are after-tax dollars, investment growth is tax-free, and distributions are tax-free if used for qualified education expenses.
• Some states offer a tax deduction or a credit for a contribution to a 529 plan.
• A 529 Plan can be rolled into another 529 plan without triggering income tax if the rollover is for the benefit of the same beneficiary or a family member.
  • Beginning in 2024, beneficiaries can make rollovers from 529 plans to Roth IRAs up to a lifetime total of $35,000, subject to specific rules and requirements.
• A valuable alternative to a 529 plan could be funding a Roth IRA; however, some 529 tax advantages may not be available.

If you have any further questions, please get in touch with your tax advisor.

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