|
Replies: 16
| visibility 1
|
Hall of Famer [22948]
TigerPulse: 100%
Posts: 16898
Joined: 12/2/00
|
Tax advantage for 529 plan before college
Feb 18, 2022, 12:46 PM
|
|
Anybody withdrawing from their 529 plans to help pay for middle/high school? You can apply $10k each year.
Are there tax advantages by contributing $10k to a 529 plan each year and then withdrawing $10k for school each year? Or is it all the same if I just paid school out of pocket and let the 529 keep building towards college?
|
|
|
|
 |
All-In [42886]
TigerPulse: 100%
Posts: 10443
Joined: 3/1/18
|
My guy said pass it all through the 529.***
Feb 18, 2022, 12:47 PM
|
|
|
|
|
|
|
|
All-In [42886]
TigerPulse: 100%
Posts: 10443
Joined: 3/1/18
|
Oh, we should ask someone smart
Feb 18, 2022, 12:48 PM
|
|
like FG Father G®
|
|
|
|
|
|
CU Guru [1059]
TigerPulse: 92%
Posts: 792
Joined: 1/14/11
|
Re: Tax advantage for 529 plan before college
Feb 18, 2022, 1:21 PM
|
|
I am a Financial Planner......I assume you are a SC resident. If that is the case, yes put the $10k into the 529 and then take it our to pay the tuition. Do not just send it directly to the school. As a SC resident, if you deposit funds into the SC 529 you get a deduction for your SC taxes (no Fed). Assume you pay 6% SC tax then its about a $600 savings.
Correct....can take our up to $10k for younger than college.
|
|
|
|
|
|
Hall of Famer [22948]
TigerPulse: 100%
Posts: 16898
Joined: 12/2/00
|
Thanks man!***
Feb 18, 2022, 1:49 PM
|
|
|
|
|
|
|
|
Hall of Famer [22948]
TigerPulse: 100%
Posts: 16898
Joined: 12/2/00
|
What's your prediction on college cost in 7-10 years?
Feb 18, 2022, 1:56 PM
|
|
Assuming a school like Clemson in-state rates + room/board/books
|
|
|
|
|
|
Lot o points [163012]
TigerPulse: 100%
Posts: 31933
Joined: 1/17/07
|
Great question.
Feb 18, 2022, 2:31 PM
|
|
All I know is whatever you save for college will not be enough.
LOL.
I was lucky, SC had a prepaid tuition plan when my kids were young, so I did that - saved me a ton of cash, but SC lost a ton of cash, so they quit that program.
|
|
|
|
|
|
CU Guru [1059]
TigerPulse: 92%
Posts: 792
Joined: 1/14/11
|
Re: What's your prediction on college cost in 7-10 years?
Feb 18, 2022, 2:39 PM
[ in reply to What's your prediction on college cost in 7-10 years? ] |
|
My prediction on in-state tuition rates over next 5-7 years?
I predict you will continue to see increases just not at the rate we have over the past 10 plus years. Its absurd....probably on average a 5% increase y/o/y. I read somewhere that over the past 20 years the price of tuition for instate public school increased by 200%
What I hope happens.......I think we all agree that most institutions of higher learning are grossly mismanaged and have layers of unneeded bureaucracy. It has gotten out of hand and I often wonder if it really makes sense for some number of students. I would love to see enrollment/applications decrease across the board forcing these institutions to make some major decision/cutbacks/etc. Maybe if these interest in 4 year schooling wanes then it may force prices to moderate or come down some. I just think that the model is broke. Its crazy what it "costs" to educate........
|
|
|
|
|
|
Lot o points [163012]
TigerPulse: 100%
Posts: 31933
Joined: 1/17/07
|
|
|
|
|
|
All-In [31904]
TigerPulse: 100%
Posts: 37197
Joined: 11/22/03
|
You get a state income tax deduction for 529 deposits...
Feb 18, 2022, 2:22 PM
|
|
why wouldn't you want to run it through your 529?
|
|
|
|
|
|
Hall of Famer [22948]
TigerPulse: 100%
Posts: 16898
Joined: 12/2/00
|
My first time. Didn't know if a wash rule or income limits
Feb 18, 2022, 2:53 PM
|
|
Definitely plan to go through 529 now.
|
|
|
|
|
|
Lot o points [163012]
TigerPulse: 100%
Posts: 31933
Joined: 1/17/07
|
Nope. It is one of those loopholes that probably should be
Feb 18, 2022, 2:56 PM
|
|
corrected, but take advantage of this while you can.
|
|
|
|
|
|
CU Guru [1059]
TigerPulse: 92%
Posts: 792
Joined: 1/14/11
|
Re: Nope. It is one of those loopholes that probably should be
Feb 18, 2022, 3:06 PM
|
|
Also....and this is big....if anyone has money in another states 529 plan and are now a SC resident.
You can "roll" the money from the former state into the SC 529 plan and you get a deduction on those "rolled" assets.
|
|
|
|
|
|
Lot o points [163012]
TigerPulse: 100%
Posts: 31933
Joined: 1/17/07
|
I used to have clients who did not like SC plan
Feb 18, 2022, 3:07 PM
|
|
so they would do the opposite.
|
|
|
|
|
|
All-In [31904]
TigerPulse: 100%
Posts: 37197
Joined: 11/22/03
|
hmm...interdasting....our 529's are still in GA and...
Feb 18, 2022, 3:26 PM
[ in reply to Re: Nope. It is one of those loopholes that probably should be ] |
|
we live in SC now.
You're saying we can roll the GA 529 into a SC 529 and deduct the amount of the roll-over on SC income taxes like a contribution to the SC 529?
|
|
|
|
|
|
CU Guru [1059]
TigerPulse: 92%
Posts: 792
Joined: 1/14/11
|
Re: hmm...interdasting....our 529's are still in GA and...
Feb 18, 2022, 3:44 PM
|
|
Yes, that is correct. Contributions, including rollover contributions, are fully deductible. I believe that if the rollover makes it to the SC 529 acct before April 15 you can actually apply that to your 2021 taxes or have it count at a 2022 contribution. Check with your CPA.
Why did your clients not like the SC 529 plan. Surprisingly, the SC 529 plan is one of the highest rated plans
|
|
|
|
|
|
Lot o points [163012]
TigerPulse: 100%
Posts: 31933
Joined: 1/17/07
|
Because their Fin Advisor wanted them in another plan
Feb 18, 2022, 6:16 PM
|
|
I am sure. Now this was many years ago when SC first started the 529 plan.
|
|
|
|
|
|
Replies: 16
| visibility 1
|
|
|
50
