Showing posts from October, 2021

Tax Savings Tips: October 2021

  Taxation of 529 College Savings Account Withdrawals   The big advantage of 529 plans is that qualified withdrawals are always federal-income-tax-free—and usually state-income-tax-free too.   What you may not know is that not all 529 withdrawals are tax-free qualified withdrawals, even in years when you have heavy college costs.   Here are six important points to know about 529 withdrawals.   Point No. 1: You Usually Have Several Payment Options   Say you are the 529 account owner or plan participant . Plans commonly use both terms to describe the person who established and controls the account. This letter will use account owner.   As the account owner, y ou can generally have a withdrawal check cut in your own name or have an electronic deposit made into your own account.   Alternatively, you can have a withdrawal issued in the name of the account beneficiary (the college student for whom you set up the 529 account, usually a child or grandchild) or