College expenses are escalating each year for both private and public universities.
Even with scholarships, grants and part time jobs, these rising costs make it increasingly
difficult for students and parents to meet the cost of a college education. Recognizing
this, the Federal Government established regulations that enable parents to save
and invest for their children's college expenses on a tax-free basis. These provisions
of the Federal tax law are known as the "529 Plan" and resulted in most states adopting
similar provisions of state tax laws to expand the benefits of the program to include
state tax advantages
With a CareSponsors 529 Plan account, you pay no taxes while the account accumulates.
Since taxes do not diminish your earnings each year, your account balance has the
potential to grow faster than comparable taxable investments.
Additionally, qualified withdrawals are not subject to federal income tax, although
state income tax may apply. Please remember, you can make withdrawals for non-education
expenses, but these non-educational withdrawals will likely be subject to state
income tax and will also be subject to federal income tax and a federal 10% additional
tax. Please see your tax advisor before making any withdrawals from your 529 account.
Every family's savings, investment and tax situation is different and requires careful
review of their unique situation with professional advisors. A 529 College Saving
Fund requires that same careful consideration and evaluation as part of each family's
financial plan. It is recommended that you consult with your:
- Tax Advisor
- Lawyer
- nvestment Advisor