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The annual contribution limit for a 529 college savings plans is set by the federal gift-tax exclusion limit. As of 2008, the current limit is $12,000. There is a one-time exception, for parents/sponsors who want to make a large deposit. A parent may make up to five years of contributions in a single year, provided that no further contributions are made in that period. This means that each parent can invest $60,000 or up to $120,000 in total, with a single deposit, and without incurring any tax penalties, provided they do not add any additional money to the 529 plan for the next five years. In addition, each plan has a maximum contribution limit, which regulates how much money can be deposited into the account. The limit applies to deposits, not to the account value, so the future growth of your savings does not reduce the amount you can contribute. The limits vary from state to state, but on average they are about $250,000, check with your 529 plan manager or state treasurer's department to find the limit for your plan, or you can visit Morningstar.com, which lists the limit for each plan in its online 529 reference table.
What else can I help you with?
What are the main differences between a Coverdell Education Savings Account and a 529 plan?
The main differences between a Coverdell Education Savings Account and a 529 plan are the contribution limits, eligible expenses, and investment options. A Coverdell account has lower contribution limits and can be used for K-12 expenses, while a 529 plan has higher contribution limits and is typically used for college expenses. Additionally, 529 plans offer more investment options compared to Coverdell accounts.
What are benefit of a 529 plan?
Many plans have a low monthly contribution requirement
Is a benefit of a 529 plan?
many plans have a low monthly contribution requirement
What is a benefit of a 529 plan?
many plans have a low monthly contribution requirement
What are my IRA contribution limits?
Information about IRA contribution limits may be found directly on the IRS official website. Navigate to the retirement plans section and then to the IRA topics. These articles will help you to calculate your limits for the tax year.
What information can you give me on a 529 savings plan?
529 Savings plans are designed to help someone save for college. Most 529 plans are state sponsored.
What is 529 location?
529 plans are tax-advantaged savings plans designed to encourage saving for future education costs. The number "529" refers to the section of the Internal Revenue Code that governs these plans. Each state offers its own 529 plan, which can be used to save for a beneficiary's qualified education expenses.
Do 529 College Savings plans adjust for inflation?
529 savings plans CAN adjust for inflation. This is usually based on the state your in and how large your savings plan is.
Can I have multiple 529 plans?
Yes, you can have multiple 529 plans for different beneficiaries, such as children or grandchildren. Each plan can have its own contributions and investment options.
Can you rollover 401k roth IRA into a 529 plan?
Individual retirement arrangements were created to help you save for retirement while 529 plans are designed for education savings. Even if you're done with school, the IRS rules don't allow you to roll money straight from a 529 plan to an IRA. If you do so, you're treated as if you took a 529 plan distribution and made a regular IRA contribution.
What is another term for 529 plan?
Qualified Tuition Programs" and sometimes called "section 529 plans"
Where can I find some tips regarding 529 savings plans?
The 529 college savings plan is an excellent tool for saving for your children's future. Financial guru, Clark Howard, offers numerous tips on 529 plans on his website at www.clarkhoward.com. Look for his guide to 529 plans. The SEC has an excellent resource on the legalities of the 529 savings program. You can find more information at http://www.sec.gov/investor/pubs/intro529.htm.
