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admin | Category: Erective Dysfunction 2016 | 07.03.2015
It’s unanimous: In a rare show of bipartisan support, the Senate Finance Committee (SFC) voted 26 -0 to approve a bill that would improve and extend benefits for Section 529 plan accounts.
Now that President Obama has backed off his proposal earlier in the year to reduce tax benefits for 529 plans and to consolidate several tax law provisions relating to higher education, it appears that the chances for enactment of this measure are strong. With a Section 529 plan, you can contribute an amount based on a state-imposed limit to an account for the benefit of a future college student. An antiquated distribution aggregation requirement for plan administrators would be removed.
Tax relief would be provided if a student has to withdraw from school for illness or other reasons. Our website uses an automated translation service to convert our English language website into other languages. Virginia529 accounts are not deposits or obligations of, or insured or guaranteed by Virginia529, the Commonwealth of Virginia, or any agency or instrumentality thereof. Download The Money Dominating ToolkitTM and join a community of 20,000 who are building wealth on their terms. Get free access to our Money Dominating Tool Kit, and 2 chapters of my best selling book, Soldier of Finance.
These resources will give you the tools you need to start building real wealth and positively impact your life today. For parents saving for their children's college education, a Section 529 plan may offer several advantages. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.

The bill, introduced by Senator Chuck Grassley (R-IA), closely resembles legislation passed by the full House on February 26. The earnings in the account grow without current tax and withdrawals used to pay for qualified higher education expenses, like tuition and room and board, are tax-free.
Currently, this cost isn’t covered, although “books and supplies” count as qualified expenses. This requirement was needed prior to 2001 when all distributions were treated as being taxable. Under current law, any refunds from the college are subject to immediate tax and a 10 percent penalty. According to a recent estimate cited by SFC Chairman Orrin Hatch (R-UT) in a press release on the bill, the total investment in 529 plans around the country now exceeds $247 billion, with an average account of more than $20,000. If there’s any money left in the account when the student graduates, it can be rolled over tax-free into an account for someone else in the family.
Prospective participants should seek the advice of a professional concerning any financial, tax, or legal implications related to opening an account. Virginia College Savings Plan (Virginia529) cannot and will not provide legal, financial or tax advice and the information provided on this website should not be construed as such with respect to the consequences for any particular individual as a result of contributions or distributions from a Virginia529 account. When the child is ready to go to college in 10 years, the shares you bought will pay for an entire year of tuition—no matter what it costs at that point.
Later contributions will be credited according to the costs that prevail at the time.)A prepaid tuition plan ensures that the money you put in will grow to keep up with rising costs.
You don't risk losing your principal, and your investment generally is guaranteed by the state.2.

In contrast to a prepaid tuition plan, a college savings plan doesn't guarantee that your returns will keep pace with rising college costs. But these plans have the potential to produce higher returns than a prepaid plan depending on the performance of the investments you choose.Usually, these 529s offer an asset allocation strategy geared to the current age of beneficiaries or the year when they'll enter school.
Such strategies may use more aggressive investments in the early years and switch to more conservative options later.You're not obligated to use a Section 529 college savings plan for a college in your state, and you're free to use another state's plan if you like its features. Keep in mind, though, that in-state plans may offer state income tax deductions or other benefits for residents.These plans also offer flexibility if an intended beneficiary doesn't go to college or if there's money left over after graduation. Typically, a plan will allow one such change a year.The PATH Act includes a couple of other significant changes in this area. For one thing, it adjusts a rule relating to taxable distributions for non-qualified expenses.
Under the new law, each such distribution will be taxable based on the amount only in that particular account, rather than in all the Section 529 accounts you've established. But with 529s, you can contribute an amount equal to five years' worth of gifts if a proper gift tax return is filed.

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