Picking the best 529 college saving plan is about more than tax breaks

Personal Finance

If you’re choosing your college savings plan based solely on state tax breaks, then you’re doing it wrong.

More than 30 states, plus the District of Columbia, offer state tax breaks to residents for contributions to a 529 plan — the college savings account families use to save and pay for education on a tax-free basis. Indeed, 45 percent of parents said in-state tax incentives were a factor in their 529 plan selection, according to a survey from Strategic Insight.

But as convenient as it may be to invest in your state’s plan just for the tax break, experts actually warn against it.

Other factors matter, too, especially now that the Tax Cuts and Jobs Act allows families to tap a 529 plan to cover up to $10,000 in private elementary and high school expenses each year. As of Sept. 30, 2017, these plans held $282.2 billion in assets, Strategic Insight found.

Source link

Products You May Like

Articles You May Like

Shake Shack reports fourth quarter earnings 2017
Banks are the sweet spot of this market that’s about to get a lot tougher
This $2,000 expense could blindside happy homebuyers
Apple buybacks, dividend increases under repatriation: UBS note
Bonds are entering a rising rates cycle for the first time since the 1940s

Leave a Reply

Your email address will not be published. Required fields are marked *