Daniel Cullinane CPA
25 Plaza 5 25th fl Jersey City NJ phone 732-516-1648 fax 732-516-9778
2500 Plaza 5 25th fl Jersey City NJ 07311 phone 732-516-1648 fax 732-516-9778
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What is a 529 plan?
A plan operated by a state or educational institution, with tax advantages and potentially other incentives to make it easier to save for colleg and other post secondary training for a designated beneficiary, such as a child or grandchild
What is the main advantage of a typical 529 plan?
Earning are not subject to federal tax and generally not subject to state tax ehen used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and borad. Contributions to a 529 plan are not deductible.
What is the definition of eligible computer technology?
The technology, equipment, or services aualify if they are used by the beneficiary of the plan and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution
What does computer or equipment mean?
This means any computer and related peripheral equipment. Related peripheral equipment is defined as any auxillary machine which is designed to be place under the control of the central processing unit of a computer, such as a printer.
Is the cost of the purchase of any computer technology or equipment or internet access and related services available for any other education benefit under the tax lawsZ?Z
No, it is only for 529 plan withdrawels
How long has the 529 plan been around?
Congress created them in 1996 and they are named after section 529 of the Internal Revenue Code
Can anyone set up a 529 plan?
Yes. You can set one up and name anyhone as a beneficiary. There are no income restrictions and there is no limit to the number of plans you can set up.
Are there contribution limits?
Yes. Contributions can not exceed the amount necessary to provide for the qualified education expenses of the beneficiary. If you contribute to a 529 plan, be aware that there may be gift tax conseqauences if your contrituion, plus any other gifts, toa particular beneficiary exceed $14,000 during the year.
Are there different types of 529 plans?
There are two basic types: prepaid tuition plans and savings plans. Each state has itw own plan.
Am I restricted to my own state's 529 plan?
No. Your state's 529 plan may offer incentives to win your business. But the market is competitive and you may find another plan you like more.
Who controls the funds in a 529 plan?
Whoever purchases the 529 pl;an is the cuttodian and controls the funds until they are withdr
Each 529 plan has one designated beneficiary What does that mean?
A designated beneficiary is usually the student or future student for whm the plan is intended to provided benefits.
Can I change the beneficiary of a 529 plan I have set up?
Yes. There are no tax consequences if you change the designated beneficiary to another member of the family.Any funds distributed from a 529 plan are not taxable if rolled over to another plan for the benefit of the same beneficiary or for the same beneficiary or for the benefit of a member of the beneficiary's family.
What is an eligible educational institution?
An eligible educational institution is generally any college, university, vocational school, or other post secondary educational institution eligible to participate in a student aid program administered by the US Department of Education.