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529 Plans

How Much Should You Save for College?

A client’s former advisor told her that she should save $800,000 per child for college. None of my initial reactions to that were appropriate for a client meeting, but how much should you save for college is an important question for a lot of families so let’s dig into that. First, why do advisors tell people that they need to…

What Do You Do With Form 1098-T and 1099-Q?

Form 1098-T is a tuition statement that students receive from their college. It serves two primary purposes: Documenting eligibility to claim the American Opportunity Tax Credit or Lifetime Learning Credit Documenting that the student was enrolled in a college and that 529 withdrawals up to net cost of attendance are therefore qualified Form 1098-T isn’t filed with your taxes; instead,…

Choosing a 529 Plan

A recent survey showed that while almost two-thirds of parents were saving for college, only about one-third are saving in a 529 plan. That’s unfortunate, since 529s are usually the best choice for savings, for a lot of reasons. On the other hand, it’s not unexpected, given that the vast array of often confusing choices can be a barrier to…

Superfunding a 529

A contribution to your child’s 529 account is, according to the IRS, a gift to your child. This means that it’s subject to annual gift limits: any individual can gift another individual $15,000 in 2021 without reporting it anywhere or paying any taxes on it. In 2022, the limit– or exclusion amount– goes up to $16,000. Anyone who contributes more…

Gifting to Your 529

Tis the season to put your money where your mouth is. Do you always say, “I wish my kids didn’t get so much stuff”?? If so, you can give family and friends another option this holiday season: Making a gift to your child’s 529. Most 529 plans allow you to create a gifting page or link, allowing others to contribute…

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