• LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Stockpile Section 529 funds for the future

by on
in Small Business Tax,Small Business Tax Deduction Strategies

The amount you transfer to a Section 529 plan for college savings on behalf of a beneficiary qualifies for the annual gift-tax exclusion. Under the exclusion, you can give away up to $13,000 a year—or $26,000 for joint gifts made by a married couple—to an account for the beneficiary without paying any gift tax.

Strategy: Front-load your contributions to a Section 529 plan. The tax law allows you to give the equivalent of five years’ worth of contributions up front with no gift-tax consequences. The gift is treated as if it were spread out over the five-year period.

For instance, you and your spouse might together contribute the maximum $130,000 (5 x $26,000) on behalf of a grandchild this year without paying any gift tax. If you have five grandchildren entering college soon, together you can contribute $130,000 to their Section 529 plans, completely free of any gift-tax consequences.

Tip: Any excess above the annual gift-tax exclusion may be sheltered by the $1 million gift-tax exemption.

Like what you've read? ...Republish it and share great business tips!

Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...

We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.

The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.

" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/10255/stockpile-section-529-funds-for-the-future "

Leave a Comment