Rules for Using A 529 Account To Repay Student Loans
When the Secure Act passed in 2019, a new option was opened up for excess balances left over in 529 accounts called a “Qualified Loan Repayment” option. This new 529 distribution option allows the owner of a 529 to distribute money from a 529 account to repay student loans for the beneficiary of the 529 account AND the beneficiary’s siblings. However, this distribution option is not available to everyone, and there are rules and limits associated with these new types of distributions.
Top 10: Little-Known Facts About 529 College Savings Accounts
While 529 college savings accounts seem relatively straightforward, there are a number of little-known facts about these accounts that can be used for advanced wealth planning, tax strategy, and avoiding common pitfalls when taking distributions from these college savings accounts.
529 to Roth IRA Transfers: A New Backdoor Roth Contribution Strategy Is Born
With the passing of the Secure Act 2.0, starting in 2024, owners of 529 accounts will now have the ability to transfer up to $35,000 from their 529 college savings account directly to a Roth IRA for the beneficiary of the account. While on the surface, this would just seem like a fantastic new option for parents that have money leftover in 529 accounts for their children, it is potentially much more than that. In creating this new rule, the IRS may have inadvertently opened up a new way for high-income earners to move up to $35,000 into a Roth IRA, creating a new “backdoor Roth IRA contribution” strategy for high-income earners and their family members.
Grandparent Owned 529 Accounts Just Got Better
A 529 account owned by a grandparent is often considered one of the most effective ways to save for college for a grandchild. But in 2023, the rules are changing………
Understanding FAFSA & How To Qualify For More College Financial Aid
As the cost of college continues to rise, so does the financial stress that it puts on families trying to determine the optimal solution to pay for college. It’s never been more important for parents and family members of these students
New York May Deviate From The New 529 Rules
When the new tax rules were implemented on January 1, 2018, a popular college savings vehicle that goes by the name of a “529 plan” received a boost. Prior to the new tax rules, 529 plans could only be used to pay for college. The new tax rules allow account owners to withdraw up to $10,000 per year per child for K – 12 public school, private school,
Tax Reform: Changes To 529 Accounts & Coverdell IRA's
Included in the new tab bill were some changes to the tax treatment of 529 accounts and Coverdell IRA's. Traditionally, if you used the balance in the 529 account to pay for a "qualified expense", the earnings portion of the account was tax and penalty free which is the largest benefit to using a 529 account as a savings vehicle for college.So what's the
Divorce: Make Sure You Address The College Savings Accounts
The most common types of college savings accounts are 529 accounts, UGMA, and UTMA accounts. When getting divorce it’s very important to understand who the actual owner is of these accounts and who has legal rights to access the money in those accounts. Not addressing these accounts in the divorce agreement can lead to dire consequences
