For parents with more than one child - especially if the children are four or more years apart - the question of whether to open one 529 for all the children, or a 529 plan for each individual child.

You can find tax guides for students and parents to help you navigate college expenses and tax benefits.Ī 529 plan can only have one beneficiary at a time, but you can change the beneficiary. There are also tax breaks for married couples filing jointly (household adjusted gross income up to $130,000) and single individuals ($65,000) for tuition and fees. She suggested saving receipts for any items purchased with 529 funds for tuition and fees, books, room and board, transportation and other educational expenses. One thing to keep an eye on is the IRS rules for qualified higher education expenses since they’re subject to change every year, said Karen Vibe, an Ameriprise financial adviser. The great thing about a 529 plan is that, even if the custodian experienced a financial hardship and had to withdraw funds from the plan, the custodian would only pay tax penalties on the account’s investment gains. Anyone can contribute to a 529 as long as they stay within the IRS tax gifting limit of $15,000 per person per year.

A 529 is the optimal savings plan for those looking for tax cuts as it is entirely tax-free when used for educational expenses.

529 qualified expenses irs