529 Education Plans

529 plans are designed as savings accounts for their beneficiaries’ education expenses & offer both tax-savings & asset protection advantages. Unlike with custodial accounts, 529 plan account owners maintain ownership of the account until money is dispersed. They can be used for a range of educational expenses including college, K-12 tuition & student loan repayments.

So long as the money stays within a 529 plan, no federal income taxes are due on earnings. When plan money is used to pay qualified expenses, withdrawals are also tax-free at the federal level & in many states. Penalties do occur if plan money is withdrawn for non-educational expenses.

Contributions up to $75,000 per year or $150,000 per year for couples are excluded from the lifetime federal gift-tax for each beneficiary.