Contributions to 529 accounts - - ModernMedicine

Contributions to 529 accounts
Publish date: Oct 8, 2010
By:  Aaron Skloff, AIF, CFA, MBA
Source: Medical Economics

Q: I've heard there is a way that my husband and I could contribute more than the $13,000 annual limit to our children's 529 accounts. Is that true?


Aaron Skloff, AIF, CFA, MBA
A: Yes. You can use a special 5-year "pull-forward" rule, which permits each of you to contribute $65,000 to each child's account in a single year. That means you and your spouse can contribute a combined $520,000 ($65,00 X 2 contributors X 4 children), although you then can't make any more contributions for the next 5 years. The $520,000 can remain in the 529 for your children, grandchildren, great-grandchildren, and even beyond. The assets grow tax-free, and withdrawals are tax-free as long as they are used for higher education expenses. Even better, contributions are removed from your estate, thus lowering taxes on it.








Send your money management questions to medec@advanstar.com
Answers to our readers' questions were provided by Aaron Skloff, AIF, CFA, MBA, chief executive officer of Skloff Finanial Group, Berkeley Heights, New Jersey.

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Source: Medical Economics, 10/8/2010
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