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529 College Savings Plan
Posted on 1/24/10 at 11:15 am
Posted on 1/24/10 at 11:15 am
Looking to start a college savings plan for my newborn and was given some general information regarding a college savings plan under Section 529 of the IRC, but nothing specific to Louisiana's plan. Anyone have any pros/cons for or against participating in one of these plans?
4
Posted on 1/24/10 at 11:15 am to Roscoe
Money Board
Posted on 1/24/10 at 11:16 am to Roscoe
pros: tax free growth
Posted on 1/24/10 at 2:54 pm to yellowfin
quote:
pros: tax free growth
Only as long as the funds are used towards college expenditures though....correct?
Posted on 1/24/10 at 5:29 pm to lynxcat
Yes. We have one ... through Edward Jones.
Posted on 1/24/10 at 7:35 pm to lynxcat
quote:
Only as long as the funds are used towards college expenditures though....correct?
Is it college specific or for other educational expenses?
Posted on 1/24/10 at 8:47 pm to SLC
their is a matching funds opportunity in the la if you qualify.Its a good tool and you gave transfer it to other kids if you need to. The biggest issue is whose name its under. If you have to put it under the kid that could screw up financial aid if needed.I would never put anything under the kids name. You can order the kit from La. i think its called START and all the info is free
Posted on 1/24/10 at 10:07 pm to SLC
We were told that "supplies" count ... laptop, art supplied for art majors for example, etc.
Posted on 1/25/10 at 7:26 am to tiger91
Anyone know how the withdrawal of funds for either qualified or unqualified expenses are monitored or managed?
Posted on 1/25/10 at 8:06 am to Roscoe
quote:
Anyone know how the withdrawal of funds for either qualified or unqualified expenses are monitored or managed?
A couple of years ago, my husband's CPA screwed up something which led to some dividends not being reported correctly. IRS discovered it, went looking for other things, and saw my husband didn't report distributions from his older daughter's 529 as income (you and the IRS are provided a 1099-Q when distributions are made). We had to provide documentation that the earnings portion of the distributions were used for qualified higher education expenses. It hasn't come up again (yet).
Posted on 1/25/10 at 10:30 am to Roscoe
(no message)
This post was edited on 8/28/11 at 10:56 am
Posted on 1/25/10 at 10:48 am to Roscoe
In case anyone was wondering, Dave Ramsey isn't a big fan of 529's
Posted on 1/25/10 at 3:11 pm to kjheath1
quote:
In case anyone was wondering, Dave Ramsey isn't a big fan of 529's
I hate how people treat him like a god.
Posted on 1/25/10 at 3:14 pm to kjheath1
quote:
In case anyone was wondering, Dave Ramsey isn't a big fan of 529's
Did you hear him say why?
Posted on 1/25/10 at 4:03 pm to lynxcat
quote:
I hate how people treat him like a god.
+1
when he starts living in reality I will take some advise. his advise is on the level of "don't eat and you won't get fat"
Posted on 1/25/10 at 5:00 pm to lynxcat
Whoooaaaa...
The last thing I meant to imply is that I like Dave Ramsey. I agree, people treat him like a God, and his advice equates to "don't eat, and you won't get fat". It's quite entertaining to see people follow his advice as if they are in a trance. Although some of his advice has merit, much of it is garbage.
One of the disadvantages of a 529, is that there are many variables which will nullify the tax advantages of it. For example, what if the child doesn't go to college, or gets a full ride. Yes, you get tax deduction now, but will have to pay the taxes upon withdrawal. Of course, no one can be sure, but do you think taxes will be higher or lower in future years?!
The reason I brought up Ramsey, was because it entertains me how many people recite his advice on how good something is (when it usually isn't), and treat it like the holy word, but no one mentions it when someone asks about something that Ramsey doesn't really care for.
The last thing I meant to imply is that I like Dave Ramsey. I agree, people treat him like a God, and his advice equates to "don't eat, and you won't get fat". It's quite entertaining to see people follow his advice as if they are in a trance. Although some of his advice has merit, much of it is garbage.
One of the disadvantages of a 529, is that there are many variables which will nullify the tax advantages of it. For example, what if the child doesn't go to college, or gets a full ride. Yes, you get tax deduction now, but will have to pay the taxes upon withdrawal. Of course, no one can be sure, but do you think taxes will be higher or lower in future years?!
The reason I brought up Ramsey, was because it entertains me how many people recite his advice on how good something is (when it usually isn't), and treat it like the holy word, but no one mentions it when someone asks about something that Ramsey doesn't really care for.
Posted on 1/25/10 at 5:06 pm to kjheath1
quote:
Yes, you get tax deduction now, but will have to pay the taxes upon withdrawal. Of course, no one can be sure, but do you think taxes will be higher or lower in future years?!
I think it works as a good safety net despite the tax loses. IF your kid gets a full ride then yeah you take a hit, but more so now kids aren't getting close to a full ride.
quote:
The reason I brought up Ramsey, was because it entertains me how many people recite his advice on how good something is (when it usually isn't), and treat it like the holy word, but no one mentions it when someone asks about something that Ramsey doesn't really care for.
I have a sis-in-law that brings up his advice and I always end it with mentioning how he filed for bankruptcy and gets in trouble for falsifying his facts every few years.
Posted on 1/26/10 at 8:31 am to fightin tigers
I agree that fewer kids are getting a full ride. My son's classmate made a 33 on the ACT and has a 4.0 ... LSU offered HALF of tuition. That's far from a full ride. Books/living expenses/laptops/supplies all count (or so I've been given that explanation). Our Edward Jones people even told us that they got approval to use some of the money without penalty for a car as the kid needed to get to off site programs or practicums or something and didn't have any transportation. I do NOT know what university this kid was going to or anything, just what I was told.
My son is a senior in HS ... we'll be needing some of our 529 soon so I guess we'll see.
My son is a senior in HS ... we'll be needing some of our 529 soon so I guess we'll see.
Posted on 1/26/10 at 9:03 am to agdoctor
quote:
The biggest issue is whose name its under.
That's not an issue. You or your spouse are always the account owners and the kid is the beneficiary on the account. It's never in their name.
Posted on 1/26/10 at 9:11 am to tiger91
quote:
living expenses
Not 100% of them. If a student lives on campus, you can take out 100% of what the school charges for room and board. If a student lives off campus, you can only take out what the school publishes as room and board expenses in its cost of attendance figures. Actual expenses could possibly be more and you can't withdraw for them without a penalty. Not to mention "living expenses" is more than just room and board.
quote:
car
Transportation costs, even those that must be paid to a school as a condition of enrollment, do not count as qualified higher education expenses.
My husband pays out of pocket every month even with a prepaid tuition plan and a 529, but the 529 has been nice.
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