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Going back to school? Fund your own 529 education plan

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in Small Business Tax,Workplace Communication

If you’re thinking of taking a course at a local college — say, to learn new computer skills — you can benefit from a tax-saving vehicle targeted at the younger generation.

Strategy: Set up a Section 529 plan for yourself. These tax-advantaged accounts aren’t just for tykes and teenagers; a Section 529 plan can provide benefits for anyone attending an accredited school … even a retiree.

The basics

Section 529 plans — usually operated by state governments — are designed to encourage families to set aside funds for a beneficiary’s future education. If you meet the requirements, you pay no federal income tax on contributions to the plans, the accumulation of earnings or the qualified distributions.

(The tax break for distributions was scheduled to expire after 2010, but Congress made it permanent in the Pension Protection Act of 2006.)

Typically, you might establish a 529 plan to help pay for a child or grandchild...(register to read more)

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