These programs provide tax advantaged ways to save for education.
Any parent, relative, or family friend can invest in a 529 plan to finance a child's education. Savings have an opportunity to grow faster because you defer paying taxes on any investment earnings. And if you use the 529 for eligible expenses, you don’t pay any federal taxes at withdrawal.
Each state's plan has its own rules and requirements, but 529s are meant to fund any type of education expense: books, college fees and tuition, trade school, and private or public K–12 education. While some state plans offer state tax benefit to their state residents, you don’t have to choose your own state’s plan; you can choose any one you like. At Legacy Financial Group, we have access to 26 plans from 26 different states.
These plans invest your contributions in mutual funds-like investment choices available in the plan with your after-tax money. You have several investment options to choose from, and the account’s value will go up or down based on the performance of your investment choices. If used for qualifying expenses, you can take the money out tax free*.
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