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Take advantage of Sect. 529 plan loopholes before they close

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in Small Business Tax

Section 529 plans are the best way to save for college. Withdrawals are totally free from federal income taxes. But if you've been dragging your feet about launching a Section 529 plan, you have new incentive to act quickly Here's why:

While many people successfully use 529 plans as de facto retirement accounts or estate-planning vehicles, President Bush's fiscal 2005 proposed budget would aim to strip away some of those perceived 529-plan "abuses."

Still, any new 529 rules approved this year by Congress won't take effect until legislation is enacted. So money you put into a 529 plan now will probably remain under the current ultrafavorable rules. As long as you don't add new money to
your 529 after legislation is passed, your "old" 529 plan will be grandfathered, entitling it to favorable tax treatment.
Work around 3 proposed changes

1. New 35-year-old age limit on plan beneficiaries. Currently, 529 plan ...(register to read more)

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