Starting a 529. Live in DC. Which state to use?

[Anonymous]

I am starting a 529 for my newborn. DC doesn't seem to have the best option. Would love to know which state others have used and why.

Thanks!

[Anonymous]

Utah or Virginia.

[Anonymous]

You can google a table of fees by state. I believe it is no longer the case Utah is the cheapest. Do factor in your tax benefit from being in DC.

[Anonymous]

Our financial advisor told us to use DC b/c the tax benefit for us outweighed the difference in fees. You can also do DC, take the deduction, and later transfer the money to a fund you like better.

[Anonymous]

When we lived in DC, we did Utah. Very happy with results so far.

[Anonymous]

We just started funds in DC for all 3 or our kids.

[Anonymous]

Anonymous wrote:Utah or Virginia.

+1

[Anonymous]

If you live in DC, the state tax benefits far outweigh the extra income from Utah's plan.

[Anonymous]

There was another thread on this recently with a lot of good info about the tax benefits (DC taxes) of the DC plan. It's up to $4000 per parent per kid.

[Anonymous]

Anonymous wrote:If you live in DC, the state tax benefits far outweigh the extra income from Utah's plan.

There's also a thread discussing this issue in some detail. I think the short version is that DC is better if you're investing a smaller sum of money (e.g. under $4,000 per year) but that other states are better if you're investing a larger sum. And neither option was as good as putting it into DC and then transferring it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you live in DC, the state tax benefits far outweigh the extra income from Utah's plan.

There's also a thread discussing this issue in some detail. I think the short version is that DC is better if you're investing a smaller sum of money (e.g. under $4,000 per year) but that other states are better if you're investing a larger sum. And neither option was as good as putting it into DC and then transferring it.

You can deduct up to $8000 per year on DC taxes if you are married.

[Anonymous]

I know but the issue was at what point the fees outweigh the tax benefit

[Anonymous]

Anonymous wrote:I know but the issue was at what point the fees outweigh the tax benefit

529 fees by state -

http://www.savingforcollege.com/529_fee_study/

[Anonymous]

The point is that the fees (although high) do not outweigh the tax advantage as long as you aren't putting in more than $4000 as an individual or $8000 as a married couple.

[Anonymous]

I forget the specifics because we did the research years ago, but I believe at some income level, there is no tax advantage to use the DC fund. That is why we went with Utah.