529 College Savings Plans are one of the best investments for your children’s education that a parent can make. A 529 College Savings Account is an excellent option for parents looking where to invest for your children. The plan allows parents to contribute after-tax dollars into the account, and the earnings and interest grow tax-free.
The parent can withdraw the money and earnings tax-free as long as they are used for a qualified educational expense. Additionally, with a 529 College Savings Plan the parent retains control over the account. So, if your child decides to skip college, you can transfer the account to another beneficiary.
Tax Benefits of 529 College Savings Plans
Nevertheless, the benefits are substantial if you concentrate on saving for your children’s education. Even though the amount you contribute yourself cannot generally be deducted from your taxes, there are states that allow deductions on a portion or the entire amount you put into the plan.
Regardless, the principal is tax-deferred and any college expense that is paid with the savings in the plan is tax-exempt. What’s nice about a 529 College Savings Plan is the latitude and authority you possess with respect to contributions.
The named beneficiary has no privileges in this regard. You can even make a distribution to yourself. Although, the part in earnings of the amount withdrawn will be assessed a penalty and be taxed for income tax purposes. The plan provides tax-exempt money for educational purposes provided that the money is used solely for that reason.
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Information and Reviews of 529 College Savings Plans by State
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Saving for College with Upromise
Upromise is a service that helps individuals save money to pay for college or to pay down existing student loan debt. Upromise is a great way to to suppliment parents and grandparents’ savings and investing in 529 College Savings Plans.
Upromise is a great way to save through partnerships with retailers. Similar to a cash back rewards card, this plan puts rewards from retailers into an account that you can use to save money for school or paying down current Sallie Mae serviced student loans.
Once you join Upromise, you simply have to shop at eligible retailers. You can shop online and get anywhere from 1$ to 25% back that is credited to your account. There are more than 600 online retailers, including Target and more, which will give you rewards that can be used for college and tuition expenses.
The beauty of the Upromise program is that you save money for college by simply shopping at the normal stores you visit every day. Upromise was created in partnership with Sallie Mae and is designed to help save for education costs.