You may be aware of 529 college savings plans. But did you realize that they can be used for other purposes, too?
529 plans are popular because their earnings grow federally tax-free, provided the money is used for qualified education expenses such as tuition and room and board. If not used for these costs, withdrawals are subject to taxes and a 10% penalty on the earnings portion.
But in recent years, new laws have expanded the potential uses of 529 plans. For one thing, they can now be used to repay student loans, within limits.
And 529 plans can also pay up to $10,000 per year in tuition expenses at private, public and religious elementary schools.
Finally, you can use a 529 plan to pay for apprenticeship programs registered with the U.S. Department of Labor. These programs are offered at community colleges and trade schools.
Not all states allow these benefits, so you’ll want to consult with a qualified tax professional about your individual situation.
Nonetheless, a 529 plan could be valuable to you. Consider how you might want to put one to work for you and your family.
This content was provided by Edward Jones for use by Daniel Pellerin, your Edward Jones financial advisor at 189 East Main Street Suite G, in Newport, (802) 334-6261.