If you are a parent searching for 529 savings plan tips, you are in the right place. As the fall months draw nearer, many families know and understand that the funds from the 529 plans that they have been investing in may be withdrawn. However, many of the benefits, such as the tax-free and tax-deferred perks, may only be experienced if those funds are used for qualified educational expenses. That is the purpose and intent of this brief college planning guide – to educate you on the best ways to use your 529 savings money for college expenses. Continue reading for the lowdown on the must-know details that are imperative to you and yours.
The first and absolutely BEST method to spending the money from your 529 plan, of course, is to pay tuition. Currently, based on figures derived from the organization that averages college costs, an education at a public college costs nearly $23,000.00. That is not small amount. Now, while it is true that your child will likely qualify for a grant or a scholarship, it is also a fact that very FEW students receive enough money from grants and scholarships to fully fund their education. This is where a 529 plan comes into play. If the funds are available, it can offset the balance between grants and scholarships and remaining debt.
Room and Board
When searching for 529 savings plan tips, you will find that the next best way to spend the money from your college savings fund is to pay for room and board. If the student that the plan is for is enrolled in college at least half the time, which is as few as 6 credit hours per semester, room and board counts as a qualified expense. While on-campus room and board is always considered to be qualified, off-campus room and board may also qualify. The commute from where the student is living to the college in which they are attending may also qualify.
Books and School Supplies
The next best method for spending the money from 529 savings plan funds is on books and school supplies. In recent years, the prices associated with textbooks and school supplies have increased dramatically. Each school year, it has been estimated, that the average student will spend approximately $1,300.00 on the textbooks that are required for their course load. Furthermore, most students spend, at least, $200.00 a year on the most basic of school supplies. The deductions of your 529 plan may help offset a tremendous amount of these expenses.
There are several 529 savings plan tips on the best methods to spend the money from the college savings fund; however, the items outlined in this guide are the most common. You may pay for tuition, room, board, books, and supplies and still experience all of the perks of the 529 plan, such as the money being spent being tax-free. You have worked long and hard to save the money for a postsecondary education. You deserve any and all tax-breaks and incentives that are possible through your 529 plan. By following the 529 savings plan tips outlined here, you will be able to successfully reap all of the benefits as outlined by your college savings fund.