Author Topic: 529 Savings Account  (Read 5796 times)

Online imayid2

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Re: 529 Savings Account
« Reply #40 on: July 11, 2022, 04:49:44 PM »
?
i have heard maybe enrolling the child in a accredited yeshiva or possibly getting a scholarship at the nonparticipating yeshiva?
If you have a friend or relative with a child in a credited school, you can ask them to allow for you to change the beneficiary to their child, pay their expenses with your 529, and have them reimburse you.

Offline ckmk47

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Re: 529 Savings Account
« Reply #41 on: July 11, 2022, 10:40:31 PM »
If you have a friend or relative with a child in a credited school, you can ask them to allow for you to change the beneficiary to their child, pay their expenses with your 529, and have them reimburse you.
The new beneficiary has to be related to the old one.
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Online imayid2

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Re: 529 Savings Account
« Reply #42 on: July 11, 2022, 11:11:41 PM »
The new beneficiary has to be related to the old one.
Hm. Ok I see that. Would only help you if you there is an available sibling to switch it to, or even a first cousin.

Offline ckmk47

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Re: 529 Savings Account
« Reply #43 on: July 12, 2022, 01:20:02 AM »
Hm. Ok I see that. Would only help you if you there is an available sibling to switch it to, or even a first cousin.
kid in law too.
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Offline davidd75

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Re: 529 Savings Account
« Reply #44 on: July 12, 2022, 09:31:07 AM »
sure about that(cousin, in law?)
I thought only siblings?

Online imayid2

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Re: 529 Savings Account
« Reply #45 on: July 12, 2022, 09:39:28 AM »
sure about that(cousin, in law?)
I thought only siblings?
I clipped this article from Eli Fried:

Offline skyguy918

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Re: 529 Savings Account
« Reply #46 on: July 12, 2022, 09:50:28 AM »
sure about that(cousin, in law?)
I thought only siblings?
I clipped this article from Eli Fried:
From the actual NY529 site:
Quote from: https://www.nysaves.org/home/college-savings-articles/content-secondary-col0/beneficiary-skips-college.html
Eligible family members include the original beneficiary's siblings, parents, cousins, nieces, nephews, aunts, uncles, grandparents, spouse, and children.

Offline davidd75

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Re: 529 Savings Account
« Reply #47 on: July 12, 2022, 03:01:47 PM »
sadly no family members to switch it to :(

Offline David61

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Re: 529 Savings Account
« Reply #48 on: March 19, 2024, 01:04:40 PM »
So for NJ my understanding is

The tax benefit are:
(1) that the money grows tax free (from both federal and state).
(2) While contributions used to be after-tax (and withdrawals are tax free), as of 2022, for households with AGI up to $200K there is a NJ state tax deduction on first $10,000 of contributions per year (per household?)
(3) For household with AGI of less than $75,000, the state has a matching grant of $750, subject to available funding. (Is this one-time per household? Or per account? or per year?)

Key features include:
--Can be used immediately following deposit (to pay current tuition bills)
--Can be used for K-12 (elementary school)
--Can be used for most beis medrash / seminary out of state schools that are accredited (I.e. that offer college credits in US)
--Can be used to pay up to $10,000 of student loans
--first $25,000 is ignored in NJ FAFSA (Does this apply to federal FAFSA too?)
--Can easily switch beneficiaries to (siblings, grandchildren, nieces, nephews, cousins, spouse)
--investment options include about a dozen mutual fund type options that can be combined to create a well-rounded portfolio of equity/fixed-income/international/money market, or a target-date-based asset allocations

Sources:
https://www.njbest.com/why-njbest/njbest-benefits
https://www.njbest.com/products/investment-options#build-your-own-portfolio
https://www.nj.gov/treasury/taxation/individuals/collegededuction.shtml

Seems like 
--anyone with (1) AGI <$75K, could benefit $750 just by contributing $750,
and/or
--anyone with (1) AGI <$200K, and (2) paying NJ state taxes, (3) paying tuition (K-12 or post-high school) and (4) some cash available, could benefit by up to $637 in NJ state tax savings, by contributing $10,000, for immediate tuition use. 

That said, NJ tax rates are progressive, so this tax benefit is more valuable for those making over $80K, that are paying 5.5%+ in state tax (which would result in $550 of annual tax savings on a $10,000 contribution) (vs 1.4%-3.5% tax rate or less on first 80K - which is a savings of up to $140-$350 annually).

Did I get all these details correct? Please advise of any errors.

Offline bhoaem

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Re: 529 Savings Account
« Reply #49 on: March 19, 2024, 01:29:20 PM »
(3) For household with AGI of less than $75,000, the state has a matching grant of $750, subject to available funding. (Is this one-time per household? Or per account? or per year?)
The matching grant is per beneficiary.
In order to keep the match your deposit needs to remain untouched for 3 years.

Offline David61

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Re: 529 Savings Account
« Reply #50 on: March 19, 2024, 02:14:24 PM »
The matching grant is per beneficiary.
In order to keep the match your deposit needs to remain untouched for 3 years.

Can you get that $750 match for an adult too? (is there an age limit for the match? There doesn't seem to be an age limit for a 529 plan)
Are these amounts subsequently transferable to another beneficiary (e.g. after 3 years)?

Online Euclid

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Re: 529 Savings Account
« Reply #51 on: March 19, 2024, 02:31:18 PM »
Can you get that $750 match for an adult too? (is there an age limit for the match? There doesn't seem to be an age limit for a 529 plan)
Are these amounts subsequently transferable to another beneficiary (e.g. after 3 years)?
Yes. Yes.

Offline David61

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Re: 529 Savings Account
« Reply #52 on: March 19, 2024, 03:20:11 PM »
Yes. Yes.

With regard to the $75,000 income cap for the $750 match. Does that apply to the income of the contributor or the income associated with the beneficiary?

I.e. Do they look at the tax return of the person who created the 529 (e.g. an sibling, cousin, grandparent, who might be earning less than $75,000),
or do they look at the income (of the parents) of the beneficiary (as the beneficiary would typically be listed as a dependent on the parents tax return). 
 

Online solmeir

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Re: 529 Savings Account
« Reply #53 on: March 19, 2024, 04:58:07 PM »
Is the matching grant per beneficiary per year, per lifetime?

Online Euclid

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Re: 529 Savings Account
« Reply #54 on: March 19, 2024, 05:15:44 PM »
With regard to the $75,000 income cap for the $750 match. Does that apply to the income of the contributor or the income associated with the beneficiary?

I.e. Do they look at the tax return of the person who created the 529 (e.g. an sibling, cousin, grandparent, who might be earning less than $75,000),
or do they look at the income (of the parents) of the beneficiary (as the beneficiary would typically be listed as a dependent on the parents tax return). 
 
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Online Euclid

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Re: 529 Savings Account
« Reply #55 on: March 19, 2024, 05:16:07 PM »
Is the matching grant per beneficiary per year, per lifetime?
lifetime

Offline yaakovely

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Re: 529 Savings Account
« Reply #56 on: March 21, 2024, 12:10:14 AM »
My question is, why is everyone who is making 200k or less not utilizing this yearly for private school tuitions? It seems like a no brainer.

Online Euclid

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Re: 529 Savings Account
« Reply #57 on: March 21, 2024, 12:32:52 AM »
My question is, why is everyone who is making 200k or less not utilizing this yearly for private school tuitions? It seems like a no brainer.
Depends on the state. Eg NJ doesn't give any tax benefits for it, so there's no advantage.
I think MD may - and people in Baltimore do use it.

Offline David61

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Re: 529 Savings Account
« Reply #58 on: March 21, 2024, 12:43:37 AM »
Depends on the state. Eg NJ doesn't give any tax benefits for it, so there's no advantage.
I think MD may - and people in Baltimore do use it.

My understanding is that In NJ, you would receive a tax deduction on state taxes. (This is a new development as of 2022).
If they contribute $10,000 (which they were anyway going to pay in private school tuition in the coming months) they would save up 6.37% (or $637).
The only reason I see not to do this is if you don't have the cash to lay out. Or if you are unaware of this opportunity, or you view it as too much of a hassle (easier to churn another CC  :) )

Online Euclid

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Re: 529 Savings Account
« Reply #59 on: March 21, 2024, 12:57:07 AM »
My understanding is that In NJ, you would receive a tax deduction on state taxes. (This is a new development as of 2022).
If they contribute $10,000 (which they were anyway going to pay in private school tuition in the coming months) they would save up 6.37% (or $637).
The only reason I see not to do this is if you don't have the cash to lay out. Or if you are unaware of this opportunity, or you view it as too much of a hassle (easier to churn another CC  :) )
I stand corrected.