Here are some reasons to save money for your children’s college education in Georgia’s 529 Plan.
- College education is expensive so it is better to put aside money.
- The money in this plan is tax free (The GA plan gives a deduction for up to $2000 per year.) and can be used to pay for tuition, certain room and board costs, computers and related technology expenses as well as fees, books, supplies, and other equipment at a post-secondary school (i.e. college or university). The earnings, if any, are free from federal income tax when used for qualified expenses
- The plan can be use in any school in Georgia.The plan can be used to pay for all college expenses.One can use the college funds outside Georgia as well , as long as it is accredited university, college or vocational school nationwide — and many abroad.
- This plan does not hurt your Financial aid (applying for scholarship or loan for your kid). So long as the parent is the account owner, funds are typically treated as belonging to the parent, not the child, minimizing the impact on financial aid. if you are applying for financial aid type the plan may be considered an asset but if you are applying for academic excellence type this should be fine. If your kid qualifies for scholarship , some scholarship does not create problem if there 529 plan exists for kid, but each scholarship is different and has their own criteria so it really depends on what kind of college scholarship you are applying for. so Before applying for study loan or scholarship it is better to remove your kid from beneficiary list.
- Anyone can help fund the plan including Parents.
- The plan can be used on any family member (On Parents or children). The money can be transferred to first cousins and grand kids if not used by your kids.
- There are many ways to invest into this plan like age-based investment options or multi-fund investment portfolio.
- There are Estate tax benefits on this plan.Path2College 529 Plan accounts are not subject to the ‘Kiddie Tax’. You can gift up to $15,000 per year if you’re a single filer, or $30,000 if you’re a married to as many individuals or beneficiaries as you like, free from income tax.
- If for some reason you cannot use the funds , you can take them out and you have to pay the penalty and tax on the earnings only that is Non-qualified withdrawals may be subject to federal and state taxes and the additional federal 10% tax.
If you have decided to open a 529 accounts then open you as the owner and keep kids as beneficiary so that if the kid is about to apply for loan or scholarship you can remove them from beneficiary list and it will not affect their application process.
Who can open an account?
Any individual with a Social Security number or federal Taxpayer Identification Number who is a U.S. citizen or resident alien can open an account and contribute to a Path2College 529 Plan account on behalf of any beneficiary.
are there fees associated with 529 plan account ?
there are no sales charges, start-up or maintenance fees.
If a person on H4 Visa studying in Georgia schools is eligible for 529 funds?
If a person fulfill the resident rules for the state, then the student is eligible for it. H4 should not be an issue.
If you have any question regarding the 529 the best place to clarify is with 529 help desk (1-877-424-4377) . They are very helpful and knowledgeable.