OP here. We live in DC. And we max out 529 (and more) to get 8K in "state" deduction. I actually opened a utah account to invest excess since fees and choices are better.

In VA, you can put 4K each into a 529 to reduce state tax liability. Times 2 accounts (one held by each parent) that's 8K per kid.

After that there is no benefit to 529.

I also would like to hear other people's ideas

We have bought over the last 20 years shares in "regular" (not indexed) mutual funds in nontaxabe account (different kinds of Janus Funds). This year one of the funds threw off a $50K+ capital distribution which drove us into the top tax bracket and we incurred a lot more in tax.

For that last few years, we switched to investing in only index mutual funds (low cost) and ETFs and do not reinvest distributions back into Janus funds. I actually sold some of the Janus mutual funds this year before getting hit with capital distributions (you have no control with capital distributions timing). Selling the Janus funds outright would incurr big taxes so i'd like to defer that as long as possible (perhaps as we to a lower income/retirement - we are 50).

I get confused on capital distributions - they are totally taxable so they reduce our basis correct? Perhaps i should rerun how much tax we would incurr to sell them.

Also i would want to move to as much $ to retirement funds so as to avoid tax hit every time we sell any fund or a capitial distribution happens. We normally have agi around 250K. We max out on deductible 401Ks. Can i put excess $ into normal 401K or another thought is 529?