Cash In On This Gift Tax Break For Section 529 Plans

Published Tuesday, May 24, 2016 at: 7:00 AM EDT

If you're worried about saving money for your children's college educations, you should investigate Section 529 plans. These tax-favored accounts enable you to sock away money that can grow without current taxes. And the funds you withdraw to pay most college costs are also exempt from income tax.Section 529 plans are operated by states, and although each state has its own ceiling for contributions, most limits are well into six figures. But there's one catch. When you contribute money to a Section 529 account on behalf of a child or grandchild, the transfer is subject to gift tax rules. The current...

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This article was written by a professional financial journalist for new michael mcdonald and is not intended as legal or investment advice.

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