Answers to Your 529 College Savings Plan Questions
It’s widely regarded that 529 College Savings Plans are one of the top ways to invest for a future college education. With so many choices available in 529 College Savings Plans, and so many differences among plans, you’re likely to have questions about how specific features relate to your situation.
Below are some answers to frequently asked questions. For help with your specific goals, consult your WoodmenLife Financial Representative and your tax and estate advisors.1
How much can I contribute?
You can contribute up to $14,000 (or $28,000 if you and your spouse give and file jointly) to a 529 plan each year without owing federal gift taxes, provided you haven’t made other financial gifts to the plan beneficiary in the same year. In addition, you can elect to make a lump-sum contribution of up to $65,000 ($130,000 for married couples filing jointly) in the first year of a five-year period, provided you don’t give the beneficiary additional taxable gifts during the five-year period.2
What are the state tax benefits?
It depends on the state you reside in. Plan contributions to that state’s 529 plan may be eligible for state tax deductions. Check with your WoodmenLife Registered Representative or tax advisor.2
Who can be the beneficiary? Who has control of the account?
A 529 plan offers the owner control over the plan, including flexibility in naming and changing the beneficiary. The beneficiary can be any age and generally can be changed to a qualified relative when needed.
1. WoodmenLife, its employees and Representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
2. If you die before the end of the five-year period, a prorated portion of the contribution will be considered part of your taxable estate.
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