DriftBusta Posted October 30, 2019 Share Posted October 30, 2019 2 hours ago, Edmo said: It is, up to 4K Under current IRS rules, all tuition and education-related fees are tax-deductible, up to $4,000. ... However, this deduction is for taxpayers with a modified adjusted gross income of $80,000 annually — or $160,000 when married and filing jointly.Jun 28, 2018 You can front load a 529 account for up to 70k, all tax deductible. Quote Link to comment Share on other sites More sharing options...
Edmo Posted October 30, 2019 Share Posted October 30, 2019 1 minute ago, DriftBusta said: You can front load a 529 account for up to 70k, all tax deductible. I used a coverdell account for some of my kids college fund, which is similar to a 529. Some of it I invested myself. I think he was referring to write offs on the tax return. Quote Link to comment Share on other sites More sharing options...
Angry ginger Posted October 30, 2019 Share Posted October 30, 2019 7 minutes ago, DriftBusta said: You can front load a 529 account for up to 70k, all tax deductible. contributions are not Fed tax deductible only the earnings are tax free if used for allowable ed expenses. Quote Link to comment Share on other sites More sharing options...
DriftBusta Posted October 30, 2019 Share Posted October 30, 2019 Just now, Angry ginger said: contributions are not Fed tax deductible only the earnings are tax free if used for allowable ed expenses. You can gift up to 14k a year each spouse or grand parent, and you can front load them 5 years. Like I said. Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Highmark Posted October 30, 2019 Platinum Contributing Member Share Posted October 30, 2019 (edited) Not that I approve but why stop at athletic scholarships? They pale in comparison to merit (academic, minority, income) and other ones. Edited October 30, 2019 by Highmark Quote Link to comment Share on other sites More sharing options...
Angry ginger Posted October 30, 2019 Share Posted October 30, 2019 15 minutes ago, DriftBusta said: You can gift up to 14k a year each spouse or grand parent, and you can front load them 5 years. Like I said. You stated it's tax deductible it is not. You are putting money in with after tax dollars, there is no Fed tax deduction for 529 contributions, there are state deductions in many states. You may be able to avoid the gift tax by front loading them but that is not a tax deduction. So it's not like you said Why You Should Front-Load Your 529 Plan LINKEDIN BY JIM PROBASCO Updated Apr 8, 2019 If you can swing it financially, it makes sense to front-load your 529 plan, also known as a “qualified tuition plan” (QTP). The purpose of a 529 plan is to pay future education costs, typically for a child or grandchild. Before passage of the Tax Cuts and Jobs Act of 2017 (TCJA), 529s could be used only for college costs. Now they can be used for private K-12 education costs as well. Front-loading the plan allows earnings to be compounded on more money over a longer time period. In other words, the more you put in initially, the longer that money has to grow and the greater the balance when the funds are needed, especially if you’re not going to need them until college. Contribution Rules The total amount you can contribute to a single 529 plan is set by the state in which the plan is established. The amount varies, but in many states it exceeds $200,000, according to the Securities and Exchange Commission. Your contribution goes in after taxes, so there is no federal tax deduction. Some states, however, offer a deduction for a portion of your contribution. Contributions grow tax free and can be withdrawn tax free as long as the money is used for qualified educational expenses. There can, however, be gift-tax consequences if you exceed the annual gift-tax limit, which is $15,000 per child or grandchild ($30,000 for spouses who give jointly). Front-Load Your 529 Plan You can get around that $15,000 limit via a special – but little known – Internal Revenue Service rule that allows you to front-load a 529 plan for up to five years at one time with no gift-tax consequences. Here’s how it works: Instead of contributing $15,000 per child per year, you contribute $75,000 per child in the first year and treat it as if you gave $15,000 per year for each of five consecutive years. You can’t make additional contributions (or take money out) until the five years are up, at which time you can contribute another $75,000 for the next five years if you wish. If you and your spouse both contribute (and file jointly), the total amount can be as much as $150,000 for each five-year period. The Value of Front-Loading The advantage of front-loading becomes clear when you compare the savings outcome with regular annual contributions. Front-loading $75,000, for example, would compound to $180,496 at 5% over 18 years (compounded annually). If you contributed the same $75,000 over 18 years in annual installments of $4,167, the total would be just $133,117. That’s $47,379 in lost earnings on your contribution. The numbers are even larger if you and your spouse front-load $150,000 versus annual contributions of $8,333. In that case the total with front-loading would be $360,993, while the total with installments would equal only $266,203, which means $94,790 in lost earnings over 18 years. Quote Link to comment Share on other sites More sharing options...
DriftBusta Posted October 30, 2019 Share Posted October 30, 2019 (edited) I probably should have stated 70k which just increased to 75k, could go to the beneficiary tax free and any accrued earnings come out tax free to pay for qualified educational expenses. You can pound down your hard on now. Edited October 30, 2019 by DriftBusta Quote Link to comment Share on other sites More sharing options...
Angry ginger Posted October 30, 2019 Share Posted October 30, 2019 1 hour ago, DriftBusta said: I probably should have stated 70k which just increased to 75k, could go to the beneficiary tax free and any accrued earnings come out tax free to pay for qualified educational expenses. You can pound down your hard on now. you were completely wrong in what you stated but your still trying to deflect 1 Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Jimmy Snacks Posted October 30, 2019 Author Platinum Contributing Member Share Posted October 30, 2019 4 hours ago, Highmark said: Not that I approve but why stop at athletic scholarships? They pale in comparison to merit (academic, minority, income) and other ones. Not sure what is up this Republican lawmakers ass. Quote Link to comment Share on other sites More sharing options...
DriftBusta Posted October 30, 2019 Share Posted October 30, 2019 41 minutes ago, Angry ginger said: you were completely wrong in what you stated but your still trying to deflect No one fucking cares nerd. Quote Link to comment Share on other sites More sharing options...
Angry ginger Posted October 30, 2019 Share Posted October 30, 2019 6 minutes ago, DriftBusta said: No one fucking cares nerd. you come here acting like your a financial guru and you prove over and over again you prove that to be false Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Jimmy Snacks Posted October 30, 2019 Author Platinum Contributing Member Share Posted October 30, 2019 2 hours ago, DriftBusta said: No one fucking cares nerd. 1 hour ago, Angry ginger said: you come here acting like your a financial guru and you prove over and over again you prove that to be false Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Highmark Posted October 30, 2019 Platinum Contributing Member Share Posted October 30, 2019 2 hours ago, Jimmy Snacks said: Not sure what is up this Republican lawmakers ass. No need to rax this but there is nothing more valuable given to a non relative or won that isn't taxed. 18 yo wins a 100k lottery its taxed. Quote Link to comment Share on other sites More sharing options...
DriftBusta Posted October 30, 2019 Share Posted October 30, 2019 (edited) 3 hours ago, Angry ginger said: you come here acting like your a financial guru and you prove over and over again you prove that to be false Oh fuck off, you just can’t help yourself. No one ever claimed I’m some financial guru, but I’m still the only guy here licensed and paid to give professional financial advice and I help build many 529s. Forgive me for being the first to note that they can be front loaded and accrue tax free. I might have misspoken, but that was the only reason I spoke up in the first place, Mr. cut and paste. How about you? Speaking of frauds, you’re nothing more than a cubicle dwelling mortgage broker. Thanks to so called professionals like you loaning money to people who couldn’t afford their mortgages, we had a housing crisis 10 years ago. See how stupid all that sounds? Thats what you sound like. Edited October 30, 2019 by DriftBusta Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Jimmy Snacks Posted October 30, 2019 Author Platinum Contributing Member Share Posted October 30, 2019 8 minutes ago, Highmark said: No need to rax this but there is nothing more valuable given to a non relative or won that isn't taxed. 18 yo wins a 100k lottery its taxed. Understood but at least with the lottery you have the money to pay the taxes whereas those with the scholarships might not. Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Highmark Posted October 30, 2019 Platinum Contributing Member Share Posted October 30, 2019 Just now, Jimmy Snacks said: Understood but at least with the lottery you have the money to pay the taxes whereas those with the scholarships might not. Agreed. I'm not for any taxes but technically its not equal protection under the law. Its a thing of great value often given to the student for zero accomplishments (not that that matters) where typically that should be taxed. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.