Can I Open a 529 Plan for My Spouse
Can my child benefit from more than 1 529 business relationship?
The curt reply is yep — the aforementioned child can be the beneficiary of multiple 529 programme accounts. If several people — parents and two sets of grandparents, for instance — want to help fund a child's education, they tin can either contribute to a single 529 account or gear up up separate plan accounts.
But looking at the aforementioned question some other way: If you want to fund a child'due south didactics, should you open your own 529 account or contribute to an existing account? The following 3 factors may affect your decision.
- The potential tax benefits of owning a 529
- What investment options each plan offers
- State maximums for 529 account balances
As the account owner, you control the avails and may get a state revenue enhancement benefit from your contributions
"While several people may contribute to a unmarried account, the person who sets it upwardly is the owner and controls how assets are invested and when distributions are made to embrace the beneficiary'due south education costs," says Richard Polimeni, manager of Education Savings Programs at Banking concern of America.
The owner too can change the casher to certain other family members of the current beneficiary, and the owner's contributions may authorize for a state income revenue enhancement deduction. Grandparents who want the potential state tax benefit of contributions and greater control of the avails might prefer funding their own 529 for your child. Depending on state police regarding contributions to a 529 account, non-owner contributors also may be entitled to a deduction.
"Grandparents who desire the potential state taxation benefit and greater command of the avails might adopt funding their own 529 plan for your child."
— Richard Polimeni, director, Education Savings Programs, Depository financial institution of America
Separate 529 plans tin exist invested differently
Every state chooses program managers for its 529 plans and decides which investment options it will offer. "You lot can choose a programme from your state or a different ane and, although most plans give y'all widely diversified investments to cull from, having accounts in multiple 529 plans for the same beneficiary could increment the mix of investments or permit you select different kinds of assets," Polimeni says.
Having 529 accounts in multiple states may aid y'all invest and contribute more
While 529s have high per-beneficiary business relationship residual maximums — generally ranging from $300,000 to well over $500,000, depending on the state that sponsors the plan — y'all might want to invest even more among several family unit members. The maximums apply to the combined balances for the aforementioned beneficiary of all accounts in one state's 529 plan. Then, if you and a grandparent, say, each institute a 529 for your daughter in the aforementioned state, total contributions to both accounts can't exceed that state's limit, though many states let avails to abound across the balance limits.
Merely if ane or both of you lot opens boosted accounts for your girl in another state, contributions in that location are capped only past that country'southward maximum. You both might be able to invest $300,000 in each state, for instance, providing $600,000 to help fund the child's education.
The maximum account residue allowed in a 529 plan is determined by the state in which the business relationship is opened. This graphic clearly highlights which U.S. states allow 529 owners to invest the near — and the to the lowest degree — corporeality of coin in their 529s. For case, New Hampshire's $542,000 maximum balance is the largest in the U.S., while Georgia and Mississippi each accept a maximum 529 balance of $235,000 — the lowest in the country.
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Source: https://www.merrilledge.com/ask/college/can-child-have-multiple-529-plans
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