5 things your clients need to know
1. The benefits of less borrowing
A 529 account can help reduce a student's debt burden, lower monthly loan payments, and decrease loan terms.
2. Applies to any college
Proceeds from an account can be used at any accredited college to pay for tuition, fees, room and board, books, and other qualified expenses.
3. The tax advantages
Pay no federal income taxes on earnings while the account is invested, and pay no federal income taxes when the money is withdrawn to pay for qualified college expenses.
4. Estate planning exclusives
In certain cases, contributions to the account can be removed from an estate for tax purposes, yet account owners retain control over the assets. This benefit is unique to 529 plans.
5. A gift of added tax benefits
A special gift tax exclusion allows five years' worth of gifts to a single beneficiary in a single year without triggering the federal gift tax.
* Edvisors, May 2015
** "Education Pays," The College Board, 2013