Comments on: 529: As easy as A-B-C

By: Back to School Taxes: What can be deducted? | Smart Family Finance

Back to School Taxes: What can be deducted? | Smart Family Finance — Thu, 18 Aug 2011 10:58:55 +0000

[...] is an education savings plan which takes its name from section 529 of the Internal Revenue Code. Investments in these plans grow tax-free and withdrawals are never federally taxable so long as you use them for eligible college expenses, [...]

By: Brittney

Brittney — Thu, 10 Sep 2009 18:50:14 +0000

Why did you opt to use a 529 plan rather than just contributing more to a tax-deferred retirement plan?

By: Kelly

Kelly — Wed, 09 Sep 2009 23:13:02 +0000

Mary Kay,
You’re absolutely right. The plan is treated as an asset of the owner for purposes of financial aid. While the assets of your parents matter when filling out those forms, the assets of your grandparents do not (unless, of course, your grandparent is your legal guardian).

By: Mary Kay Foss

Mary Kay Foss — Wed, 09 Sep 2009 22:52:04 +0000

The last time that I checked, a 529 plan owned by the grandparents did not count against the child for student aid purposes. Also payment of tuition directly by the grandparents is not treated as a gift for gift tax purposes. There are lots of good reasons to have granny help with college.