Happy New Month Moms!!!!!
One of our goals for this year, is to grow in every areas of our lives. From Personal Development, to Financial Stability as well as our Health and Nutrition. For the rest of the year, we will have monthly challenges to help us meet some of our 2018 goals.
To Kick off the “Monthly Challenge”, for the month of February, we will be starting with Financial Stability through the “529 Challenge”.
To start this challenge, here are the rules:
- Begin by opening a 529 account if you haven’t done so already.
- Set up a recurring amount of $25 or more.
- Open the account starting from February 1st to February 28th.
Here are some fun facts about the challenge:
“What is a 529 Plan: A plan operated by a state or educational institution, with tax advantages and potentially other incentives to make it easier to save for college and other post-secondary training for a designated beneficiary, such as a child or grandchild (IRS.Gov).
What are the main advantage of a 529 Plan: Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board. Contributions to a 529 plan, however, are not deductible (IRS.gov).
Can anyone set up a 529 Plan: Yes. You can set one up and name anyone as a beneficiary — a relative, a friend, even yourself. There are no income restrictions on on either you, as the contributor, or the beneficiary. There is also no limit to the number of plans you set up (IRS.gov).
Recent tax benefit: Starting in 2018, you can use up to $10,000 in 529 plan proceeds for elementary and high school costs. More than 30 states allow income tax deductions for 529 plan contributions (CNCB.com).”
Please note that there might be some specific clauses based on your state/jurisdiction, so we advice that you consult a Financial Advisor before making your decision. To learn more about the 529 plan, visit: https://www.irs.gov/newsroom/529-plans-questions-and-answers.
To read about the new tax provision that allows parents to use the money on school fees for grades K-12, visit https://www.cnbc.com/2017/12/29/tax-bill-529-plan-provision-helps-families-save-on-school-costs-taxes.html