If you invest in either of Wisconsin’s 529 plans, I’ve got good news for you. Last week the plans received hefty increases in the maximum you can contribute over the life of the plan from $246,000 to $330,000.
Keep in mind that this number represents the maximum you can contribute. If your investment earnings surpass these amounts you’re OK.
To read about the Wisconsin Edvest 529 plan or the Tomorrow’s Scholar 529, visit the Wisconsin 529 page.
Today we’re going to take a look at 529 plan options in New York.
Both of New York’s 529 plans are open to residents of all states. However, New York offers generous tax benefits to its own residents. NY residents can deduct up to $5,000 ($10,000 for couples) on their state income taxes be contributing to a NY 529 plan.
New York offers a direct plan and one sold through advisors. The direct plan has minimum deposits of only $15 when you set up a payroll deduction. The advisor program has higher minimums; please contact an advisor for assistance.
New York also recently liberalized the the rules for who can contribute to a 529 plan. Now relatives, employers, and friends can contribute to a New York 529 plan.
Click here for more information about New York 529 plans.
I came across a great blog post today at InterestingMoney.com called “5 Reasons Why You Should Open A 529 Account Right Now.”
No, it’s not about setting up an account for your kid. It points out that you can set up a 529 plan even before having children. Just make yourself (or spouse) the beneficiary. You can use it to pay for your continuing education expenses, or just transfer it to your child after they are born (or any time thereafter).
This makes great sense, especially if you are in a state that offers upfront tax benefits for investing. Why wait until your kid is born to start taking advantage of these benefits?
Investor’s Business Daily, the international finance magazine, published an article yesterday about the benefits of 529 plans. The article discusses the tax benefits, in particular not having to pay federal (and sometimes state) taxes on your investment earnings.
As 529 plans grow in popularity you’ll see more and more of these mainstream articles covering 529 plans. And 529s are becoming more popular everyday. The article points out that there is now $112B in assets under management in 529 plans.
When it comes to tax benefits, you need to consider if your state offers benefits to you before looking at other states’ plans. Take a look at your state to see what it offers.
I’m excited to announce that 529s.com has released a new report, “5 Biggest 529 Plan Mistakes”. The free report discusses ways that people make costly mistakes when setting up 529 plans.
I recommend downloading a free copy while doing your research on 529 plans.