529 Savings Account

[dovy2]

thank for all the responses. So I guess there goes the 529 plan for me 

Next at bat:
Coverdell ESA.

I know, it's only 2k per kid, but that's fine with me (at least meanwhile)

I Couldn't find anywhere online whether the above-mentioned NY law (excluding k-12 tuition) applies also to a coverdell. I tried calling the NY529 program... he was kinda hinting that it would be an option for me, but said he couldnt offer advise on a coverdell. anyone know?

[skyguy918]

thank for all the responses. So I guess there goes the 529 plan for me 

Next at bat:
Coverdell ESA.

I know, it's only 2k per kid, but that's fine with me (at least meanwhile)

I Couldn't find anywhere online whether the above-mentioned NY law (excluding k-12 tuition) applies also to a coverdell. I tried calling the NY529 program... he was kinda hinting that it would be an option for me, but said he couldnt offer advise on a coverdell. anyone know?

Coverdell is fine, it has always included K-12. I have mine at TD. I contributed for each kid for a few years, but it's small enough that I stopped bothering with it.

[Der Deutsche Jude]

I have existing student loans from a public out of state university. Can I open and fund a 529 account this year to pay the loans and receive a tax deduction from NJ?

[skyguy918]

I have existing student loans from a public out of state university. Can I open and fund a 529 account this year to pay the loans and receive a tax deduction from NJ?

Seems like you can, but the lifetime cap for paying off loans from 529 is $10k. Still worth it just for the deduction.

[dovy2]

Coverdell is fine, it has always included K-12.

yup, after much digging, found the laws about it.

https://www.tax.ny.gov/pdf/pit/irs-docs/2019/pit/publications/pub-970.pdf

page 46
 The expenses can be either qualified higher education expenses or qualified elementary and secondary education expenses.

I have mine at TD. I contributed for each kid for a few years, but it's small enough that I stopped bothering with it.

Imy"h I should have the problem that 2k per kid should be "small enough".

regarding pell grant, when my oldest kid reaches yeshiva gedolah age, I'll just move any leftover money in his account to the youngest kid.. (besides the point that I'd probably finish the money by then)

[ushdadude]

Thought to open a new thread, to split off from the retirement funds thread.

My situation:low-income, not paying any taxes (only getting, bh this year a lot ) and I'm looking at tax deferred options, . after maxing Roth IRA (this year and last year, me and DW), I BH still have a few k left this year to put away.
401k is not really for me, cuz I'm not getting anything matched.
I was looking into 529 education account, and like the Roth, seems like a no-brainer, even for medium-length investment (say 10-15 years).
Any disadvantages that I'm missing? Like, if the money can be used for any of my kids tuition at any time, what chisaron is there (besides the obvious risk of stock market crashing)?

Roth isn't tax deferred.


Do you qualify for an HSA account?

[Euclid]

Roth isn't tax deferred.

I read it that he meant tax advantaged

[dovy2]

Do you qualify for an HSA account?

no

[skyguy918]

I read it that he meant tax advantaged

+1. The common thread between Roth IRA, Coverdell, and 529 (at least before you get to the state specific deductions) is that they're after tax investment vehicles where the earnings are tax free within qualified distributions.

[davidd75]

Earnings from a  529 are always tax free if paid out as a qualified expense. Since apparently NJ is one of the states with K-12 as a qualified expense, earnings would be tax-free.

what if its a nys 529 plan and you want to pay for K-12 NJ expenses?

[dovy2]

+1. The common thread between Roth IRA, Coverdell, and 529 (at least before you get to the state specific deductions) is that they're after tax investment vehicles where the earnings are tax free within qualified distributions.

Which makes it the best options for those of us that don't pay taxes anyway

[ushdadude]

+1. The common thread between Roth IRA, Coverdell, and 529 (at least before you get to the state specific deductions) is that they're after tax investment vehicles where the earnings are tax free within qualified distributions.

Nys 529 gets up to 10k deduction on state taxes so definitely something to take into account

[dovy2]

Nys 529 gets up to 10k deduction on state taxes so definitely something to take into account

Not planning on my kids going to college, and again, in my current situation, I don't need any deductions

[skyguy918]

what if its a nys 529 plan and you want to pay for K-12 NJ expenses?

You'll be required to pay state (and possibly city) taxes on the earnings when you take the money out to pay for K-12.

Not planning on my kids going to college, and again, in my current situation, I don't need any deductions

Don't think this changes anything, but it's any post-secondary school - ie bais medrash counts.

[zh cohen]

You'll be required to pay state (and possibly city) taxes on the earnings when you take the money out to pay for K-12.

And pay back any State credit/tax benefits you got for making the contributions (I think).

[skyguy918]

And pay back any State credit/tax benefits you got for making the contributions (I think).

Which is a non issue for someone who isn't paying taxes and therefore obviously didn't take the deduction in the first place.

Not planning on my kids going to college, and again, in my current situation, I don't need any deductions

[davidd75]

anybody know if there is any viable workaround to try and use the NY 529 savings for a yeshiva gedola/bais midrash in NJ that is not accredited and/or does not participate with student aid etc.... without paying federal and state taxes and the 10% penalty?

anybody have any experience with this?

[ckmk47]

anybody know if there is any viable workaround to try and use the NY 529 savings for a yeshiva gedola/bais midrash in NJ that is not accredited and/or does not participate with student aid etc.... without paying federal and state taxes and the 10% penalty?

anybody have any experience with this?

I don't have an answer to your question. I do have some advice.
If you can afford to leave the money in the 529. Leave it there. Pay today's tuition some other way.  The investment will likely grow, although not a certainty in today's environment.  It can be used in the future for other kids and for their spouses and other relatives. Why take the 10% hit?

[zagguru]

any good match programs for New york?

[davidd75]

I don't have an answer to your question. I do have some advice.
If you can afford to leave the money in the 529. Leave it there. Pay today's tuition some other way.  The investment will likely grow, although not a certainty in today's environment.  It can be used in the future for other kids and for their spouses and other relatives. Why take the 10% hit?

?
i have heard maybe enrolling the child in a accredited yeshiva or possibly getting a scholarship at the nonparticipating yeshiva?