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529
Tuition Savings Plans Small
Numbers = Big Savings
529 www.collegesavings.org These plans provide a tremendous opportunity for parents or grandparents to put away after tax dollars that will grow and exit tax free if they are used to fund any accredited higher education for relatives. The Tuition Savings Plan is named after Section 529 of the Internal Revenue Service Code that defined it in 1996. Several states have plans and you may choose any state's plan. However, your funds will not escape Arkansas income tax when withdrawn if they are not in the Arkansas Plan. No Taxes Feature: The growth of the funds will not be taxed as they're withdrawn if they are used for a qualified educational purpose. Professional Money Management Feature: You may select your asset allocation among funds offered, but not among individual stocks or bonds. No Income Limits Feature: The gift toward higher education is open to anyone at any income level. Higher Contribution Feature: In the Arkansas Plan, you can gift up to $245,000 per student. Other state plans have even higher maximums. Creative Education Feature: Your student may pick any kind of accredited education and where. It needn't be traditional university. Fashion design, car racing, golf pro, chef, Oxford, or other training from an accredited school qualifies. Transfer Feature: A liberal definition of any related family member, including cousins and step-relatives may use the funds if the intended decides not to use it. The funds can even be deferred and handed down to the child of a child , or up to a parent. "I Need It Back" Feature: You can change your ind and take the money back if you decide you need it for whatever reason. You have full control over the assets yu've set aside for these plans. You will be required to pay a 10% penalty on the appreciation along with current state and federal income taxes .Accelerated Contributions with Special Gift Tax Treatment Feature: You can front load your contributions and avoid gift taxes by gifting up to $50,000 in one year and electing to pro-rate the annual exclusion over a five-year period. For more information: You can find an evaluation of state plans by visiting Joseph Hurley's site: www.savingfor college.com . His newest edition of The Best Way to Save for College will be out at the end of February. Call 800-487-7624 to order a copy. Information on all state plans is available at the National Association of State Treasurers 877-277-6496, or visit their website at www.collegesavings.org . |
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