Which 529 plan do you have your kids in? How much do you contribute per year?

[Anonymous]

Anonymous wrote:

From the VA 529 program guide here:

http://www.virginia529.com/documents/general/vcsp_program_guide.pdf

page 4

"Virginia taxpayers with VA529 accounts may deduct up
to the lesser of $4,000 per year or the amount contributed,
for each VA529 account they own, with an unlimited
carry-forward of unused deductions."

It is definitely per account, not per parent or per child. All of the documentation I get from the VA 529 plan has a different account number for each combination of investment choice, parent, and child.

This is nutty. Not questioning you, it appears to be true. It's just a pretty crazy deduction scheme.
In a good way, if you have that much to invest. Though it seems like one more way for the wealthy to shelter a buttload of income from taxation.

You're only avoiding state taxes, not federal. As a pp said, if you make $250k per year and contribute $5K, you save a whopping $154 in taxes.

[Anonymous]

We have the VA 529 -- we only have one now, but will probably open another this year to increase our tax deduction to $8K

[Anonymous]

VA 529 Plan. We invest $1200 per year / per kid.

[Anonymous]

Anonymous wrote:We use VA. We initially put in $20k. Now we put in $75/month. It tanked in the recession, basically down to where we had started (after 6 years of $75/month). Now it is slowly creeping back up.

We haven't started one for DD#2 yet. She's 3.5 yrs old. DH has been stalling b/c he's concerned that the market volatility will continue.

Grandparents also started one for each of their grandchildren, with an initial investment of $4000. We haven't added to those ones.

I think we won't do much for the next couple years, until both kids are in school and then we will reassess where we are.

Wait what? It tanked? What were you investing in? We have kids older than yours and it didn't tank.

[Anonymous]

We put $4,000 in the DC 529 plan in the index fund and then anything else we can contribute that year into a second account in Utah.

There was some older thread claiming you can do the multiple-accounts-per-parent-per-child thing in DC, and I have confirmed with the DC government that you cannot. You can claim a total $8,000 deduction if each parent creates a $4,000 account for a different child.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

From the VA 529 program guide here:

http://www.virginia529.com/documents/general/vcsp_program_guide.pdf

page 4

"Virginia taxpayers with VA529 accounts may deduct up
to the lesser of $4,000 per year or the amount contributed,
for each VA529 account they own, with an unlimited
carry-forward of unused deductions."

It is definitely per account, not per parent or per child. All of the documentation I get from the VA 529 plan has a different account number for each combination of investment choice, parent, and child.

This is nutty. Not questioning you, it appears to be true. It's just a pretty crazy deduction scheme.
In a good way, if you have that much to invest. Though it seems like one more way for the wealthy to shelter a buttload of income from taxation.

You're only avoiding state taxes, not federal. As a pp said, if you make $250k per year and contribute $5K, you save a whopping $154 in taxes.

+1. The state deduction is a little joke. What can be real dough are the fund fees, which is why we chose to ignore the DC plan and go straight to the Utah Vanguard one. Anyone thinking about 529s should prepare a basic excelsheet and see what happens over 10, 15 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

From the VA 529 program guide here:

http://www.virginia529.com/documents/general/vcsp_program_guide.pdf

page 4

"Virginia taxpayers with VA529 accounts may deduct up
to the lesser of $4,000 per year or the amount contributed,
for each VA529 account they own, with an unlimited
carry-forward of unused deductions."

It is definitely per account, not per parent or per child. All of the documentation I get from the VA 529 plan has a different account number for each combination of investment choice, parent, and child.

This is nutty. Not questioning you, it appears to be true. It's just a pretty crazy deduction scheme.
In a good way, if you have that much to invest. Though it seems like one more way for the wealthy to shelter a buttload of income from taxation.

You're only avoiding state taxes, not federal. As a pp said, if you make $250k per year and contribute $5K, you save a whopping $154 in taxes.

+1. The state deduction is a little joke. What can be real dough are the fund fees, which is why we chose to ignore the DC plan and go straight to the Utah Vanguard one. Anyone thinking about 529s should prepare a basic excelsheet and see what happens over 10, 15 years.

We had the same conversation and decided to do $8K in the DC 529 Index each year and then roll it out as soon as alllowed into a lower cost plan - 2 years, I think.

[Anonymous]

Why are grandparents setting up separate accounts? They don't get a tax deduction. Why aren't they contributing to the account you have already set up? Is it a trust issue? (ie, they think you might withdraw the money and have a great weekend in vegas?) I thought that most 529 plans allowed for 3rd party contributions, from grandparents and such?

http://www.savingforcollege.com/grandparents/answer.php?grandparent_faq_id=6

[Anonymous]

Anonymous wrote:Why are grandparents setting up separate accounts? They don't get a tax deduction. Why aren't they contributing to the account you have already set up? Is it a trust issue? (ie, they think you might withdraw the money and have a great weekend in vegas?) I thought that most 529 plans allowed for 3rd party contributions, from grandparents and such?

http://www.savingforcollege.com/grandparents/answer.php?grandparent_faq_id=6

if they are the owner, they DO get the tax break. am trying to sway my in laws to this, in lieu of 34 lego sets a year!

http://m.kiplinger.com/article/taxes/T002-C001-S003-tax-breaks-generous-grandparents-529-plans.html

[Anonymous]

Anonymous wrote:Why are grandparents setting up separate accounts? They don't get a tax deduction. Why aren't they contributing to the account you have already set up? Is it a trust issue? (ie, they think you might withdraw the money and have a great weekend in vegas?) I thought that most 529 plans allowed for 3rd party contributions, from grandparents and such?

http://www.savingforcollege.com/grandparents/answer.php?grandparent_faq_id=6

My parents set up a separate account just in case they need the money themselves before our kids go to college. They still own it, and can still withdraw it, if they set it up.

[Anonymous]

We have two kids (4 and 1), and I'd like to open MD investment 529 for each of them. If we contribute 5K to each account this year, can we take advantage of the whole 10K tax deduction per account (2500 per account per parent) or is it only 5K total?

[Anonymous]

Anonymous wrote:We put $4,000 in the DC 529 plan in the index fund and then anything else we can contribute that year into a second account in Utah.

There was some older thread claiming you can do the multiple-accounts-per-parent-per-child thing in DC, and I have confirmed with the DC government that you cannot. You can claim a total $8,000 deduction if each parent creates a $4,000 account for a different child.

What if two parents create separate accounts for the same child ($4000 each)?

[Anonymous]

In MD, for two kids, do we need to open accounts under each parent to be able to deduct 2500 + 2500? Or can one parent open two accounts and deduct 5K (obviously, if 5K is deposited)?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

From the VA 529 program guide here:

http://www.virginia529.com/documents/general/vcsp_program_guide.pdf

page 4

"Virginia taxpayers with VA529 accounts may deduct up
to the lesser of $4,000 per year or the amount contributed,
for each VA529 account they own, with an unlimited
carry-forward of unused deductions."

It is definitely per account, not per parent or per child. All of the documentation I get from the VA 529 plan has a different account number for each combination of investment choice, parent, and child.

This is nutty. Not questioning you, it appears to be true. It's just a pretty crazy deduction scheme.
In a good way, if you have that much to invest. Though it seems like one more way for the wealthy to shelter a buttload of income from taxation.

You're only avoiding state taxes, not federal. As a pp said, if you make $250k per year and contribute $5K, you save a whopping $154 in taxes.

+1. The state deduction is a little joke. What can be real dough are the fund fees, which is why we chose to ignore the DC plan and go straight to the Utah Vanguard one. Anyone thinking about 529s should prepare a basic excelsheet and see what happens over 10, 15 years.

I read when you (I am assuming it was you) made this comment a few years ago on here and found it fairly compelling. Then I ran the spreadsheet with the tax deduction and putting the first $4,000 into the State Street index fund, and the numbers ran better putting the first $4,000 in DC and putting the remainder in Utah. (Or doing the rollover).

[Anonymous]

Anonymous wrote:

Anonymous wrote:We put $4,000 in the DC 529 plan in the index fund and then anything else we can contribute that year into a second account in Utah.

There was some older thread claiming you can do the multiple-accounts-per-parent-per-child thing in DC, and I have confirmed with the DC government that you cannot. You can claim a total $8,000 deduction if each parent creates a $4,000 account for a different child.

What if two parents create separate accounts for the same child ($4000 each)?

They didn't give me a straight answer on that, but the way I read the rule, it is allowable. The way DC describes the tax break is:

"Deduct up to $4,000 in Plan contributions from their federal adjusted gross income each year on their D.C. tax return (up to $8,000 for married couples filing jointly if both own accounts)."

Since there's no prohibition on two different people owning an account with the same beneficiary, the beneficiary does not appear to be relevant under the rule.