Section 529 plans are popular education savings vehicles. To choose the type of 529 plan that’s right for you, it’s important to understand how 529 savings plans and 529 prepaid tuition plans work and the differences between them.
Looking for a tax-advantaged college savings vehicle that has no age restrictions and no income phaseout limits — and one you can use to pay for more than just tuition? Consider 529 savings plans, a popular way to save for higher-education expenses. Named after the section of the tax code that authorized them, 529 plans (also known as qualified tuition plans) are now offered in almost every state. You may find that 529 plans make saving for college easier than before.
It’s tax time, and your kitchen table is littered with papers and forms. As if this isn’t bad enough, you recently paid your child’s college semester bill, and you don’t know where you’ll find the money to pay the taxes that you expect to owe. Well, you might finally catch a break. Now that your child is in college, you might qualify for one of two education tax credits — the American Opportunity credit and the Lifetime Learning credit. And because a tax credit is a dollar-for-dollar reduction against taxes owed, it’s more favorable than a tax deduction, which simply reduces the total income on which your tax is based.
529 plans can be a great way to save for college, but they’re not the only way. When you’re investing for a major goal like education, it makes sense to be familiar with all of your options.
You want to retire comfortably when the time comes. You also want to help your child go to college. So how do you juggle the two?
For National College Savings Month in September, we discuss several burning issues about these popular college savings vehicles.
For Marylanders Saving For Education I want to share with you a Maryland program that offers free money for the beneficiaries of the Maryland College Investment Plan Account AKA the Maryland 529 Plan.
Armstrong Dixon
1500 Sulgrave Ave.,
Baltimore, MD 21209
443-563-1111
Armstrong Dixon is a private wealth management firm, founded in 2013 and headquartered in the Mt. Washington Village of Baltimore City, MD.
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