College Savings Plans
What is a 529 college savings plan?
A 529 college savings plan is an account used to save for college expenses such as tuition, room and board, and required books and supplies. They are state-sponsored and qualified under the section 529 of the Internal Revenue Code 26 U.S.C. § 529 whereby savings accumulated in the plan are exempt from federal tax.
There may be additional benefits offered by states as well.
Our advisor-offered plan has the following features:
- No federal income tax on earnings if withdrawals are used for qualified expenses 1
- Many states offer tax deductions on all or part of the contributions
- Usually has little affect on student's eligibility for student loans
- Many states allow donations over $300,000 per beneficiary
- Generally no income or age limitations
- Account value is considered an asset but is not counted as part of the donor's estate for tax purposes
- Open an account for anyone
- No income restrictions
- Pay qualified expenses at any eligible educational institution nationwide
- Account owners control the account, not the beneficiaries
- No penalty to change the beneficiary when both beneficiaries are in the same family
- Open an account with as little as $50 using an automatic monthly investment plan, or by making a $250 start-up contribution.
- Some plans require an advisor to set up. Let an Innovation Partners, LLC advisor help you find a plan that is right for you...
1 If withdrawals are used for purposes other than higher eduation, the earnings will be subject to a 10% federal tax penalty, in addition to federal and, if applicable, state income tax.
2 Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund and summary prospectuses and the program description, which can be obtained from a financial professioal and should be read carefully before investing.
3 An in-state 529 plan may provide tax and other benefits not available through an investment advisor plan so you should talk to a tax advisor before any financial commitments regarding the issues related to the situation are made.
Note: Investments are not FDIC-insured, nor are the deposits of or guaranteed by a bank or any other entity, so they may lose value.