Processing time for 529

[Anonymous]

Anonymous wrote:

Anonymous wrote:I scheduled a transfer from MD529 to our checking on a Friday morning and had the funds on Monday (they said it would be Tuesday). I prefer this to having them mail a check, which we’ve never done. We always have the paperwork from the school confirming our out of pocket expense. We can initiate the transfer online. I’ll do this at least a week prior to the due date all the same.

This is what we do. Much easier.

Same with me. I had an issue at one point with the check either not being mailed, being lost, something or other (American Funds). So now I pay myself first and then do an electronic transfer from my checking account to the school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I scheduled a transfer from MD529 to our checking on a Friday morning and had the funds on Monday (they said it would be Tuesday). I prefer this to having them mail a check, which we’ve never done. We always have the paperwork from the school confirming our out of pocket expense. We can initiate the transfer online. I’ll do this at least a week prior to the due date all the same.

This is what we do. Much easier.

Same with me. I had an issue at one point with the check either not being mailed, being lost, something or other (American Funds). So now I pay myself first and then do an electronic transfer from my checking account to the school.

This is OP again.

I'd be happy to pay ourselves, but DH is concerned about something -- maybe having the necessary documentation? I don't know. His logic seems flawed, but I don't want to start an argument over this. This is also the 529 my parents set up, so that is another concern since we aren't the actual account owners/holders. This one was basically cash starting in January, so it has lost very little over the last few months, compared the plans DH and I set up (which lost 5-10%), so that's why we wanted to use this first and let ours have a chance to grow back the 5-10%.

[Anonymous]

We have the checks sent directly to the schools. I always contact the bursar's office and let them know the check is on the way directly from the 529. They will waive any late fees if it arrives late (which it has not).

[Anonymous]

Remember that the school may have processing time as well.

You should request the payment now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I scheduled a transfer from MD529 to our checking on a Friday morning and had the funds on Monday (they said it would be Tuesday). I prefer this to having them mail a check, which we’ve never done. We always have the paperwork from the school confirming our out of pocket expense. We can initiate the transfer online. I’ll do this at least a week prior to the due date all the same.

This is what we do. Much easier.

Same with me. I had an issue at one point with the check either not being mailed, being lost, something or other (American Funds). So now I pay myself first and then do an electronic transfer from my checking account to the school.

This is OP again.

I'd be happy to pay ourselves, but DH is concerned about something -- maybe having the necessary documentation? I don't know. His logic seems flawed, but I don't want to start an argument over this. This is also the 529 my parents set up, so that is another concern since we aren't the actual account owners/holders. This one was basically cash starting in January, so it has lost very little over the last few months, compared the plans DH and I set up (which lost 5-10%), so that's why we wanted to use this first and let ours have a chance to grow back the 5-10%.

There is a difference with regard to the IRS documentation — distributions to the beneficiary or the college are reported to the IRS under the SSN or TIN of those entities. Distributions to the owner are reported under the social security number of the owner. However, as the owner, all you have to do is keep good records in case you are ever audited by the IRS.

DH & I own a 529 for our granddaughter. We sometimes send distributions as checks directly to her for reimbursement of qualifying expenses that she’s already incurred, but for things like tuition, it’s just too clunky of a process, and it’s easier to have the money sent to us electronically and then we send it on to the university via e-check. Granddaughter has authorized us to have access to her account at the college bursar’s office to do this. When you use your parents’ 529, it’s likely they’ll either need to have a check sent to the college directly, send a check to your DC and have them pay, or have the money sent to their own account electronically and then pay the college. Our granddaughter’s college is clear that they strongly prefer that you not send paper checks directly from the 529. It was especially an issue during Covid when people in the bursar’s office were working remotely.

It’s unfortunate that there isn’t an easier way to do this. Granddaughter’s college billing is a bit of a mess, and they tend to keep adding charges, even after you think you have a final bill and have requested a check, sometimes right up to the due date, so that there’s not time to actually request $$ from the 529 before the bill is due. I have ended up paying some of these fees out of pocket, because it’s just not worth the hassle. If I had it to do over again, I’m not sure I’d have messed with the 529 process.

[Anonymous]

We have VA 529 and had it sent directly to the school. It was sent and posted within 2 weeks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I scheduled a transfer from MD529 to our checking on a Friday morning and had the funds on Monday (they said it would be Tuesday). I prefer this to having them mail a check, which we’ve never done. We always have the paperwork from the school confirming our out of pocket expense. We can initiate the transfer online. I’ll do this at least a week prior to the due date all the same.

Same. They do an electronic transfer to my account, and then I do an electronic transfer to the school. It takes 2-3 full business days to get the cash in my account, but the credit to the school from my account is immediate. The school made it clear that they prefer electronic transfer, as especially during Covid, they couldn’t guarantee how quickly mailed checks would be received and processed.

Is there a way that would be preferable in regards to making it easier to show it was used for educational purposes when you file taxes? Should I transfer to the beneficiary (student) electronically versus having it sent to my name as the account owner? Or better to have it go directly to the school?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I scheduled a transfer from MD529 to our checking on a Friday morning and had the funds on Monday (they said it would be Tuesday). I prefer this to having them mail a check, which we’ve never done. We always have the paperwork from the school confirming our out of pocket expense. We can initiate the transfer online. I’ll do this at least a week prior to the due date all the same.

Same. They do an electronic transfer to my account, and then I do an electronic transfer to the school. It takes 2-3 full business days to get the cash in my account, but the credit to the school from my account is immediate. The school made it clear that they prefer electronic transfer, as especially during Covid, they couldn’t guarantee how quickly mailed checks would be received and processed.

Is there a way that would be preferable in regards to making it easier to show it was used for educational purposes when you file taxes? Should I transfer to the beneficiary (student) electronically versus having it sent to my name as the account owner? Or better to have it go directly to the school?

Your 529 may vary, but mine will only do an electronic transfer to the account owner. Distributions to the beneficiary and the school are by paper check sent through the mail. For smaller expenses (e.g., books or computer), I have the beneficiary pay, have her send me a receipt, and then reimburse her with a paper check. For tuition, once I get the tuition bill, I transfer to my account electronically, and then pay the school electronically. Since I have a bill from the school and am transferring that amount directly to the school, I have no concerns about being able to show that it was for a qualified expense.

[Anonymous]

This is OP again.

The account owner set up a withdrawal this morning (had to complete a form with Vanguard). It should be in my DC's account this week. I think it is being sent via e-check. (Honestly, I didn't ask... But they sent the confirmation page)