A 529 account can be used for other types of education besides college, including trade and vocational schools and more. However, if you decide to use the money for something other than qualified education expenses, you will have to pay income taxes plus a 10% penalty on the earnings.
Can you use 529 funds for other expenses?
A 529 college savings plan can be used to pay for some qualified room and board expenses like rent or other housing costs. This applies to both on-campus and off-campus room and board, as long as the costs were incurred during an academic period where you’re enrolled.
What can I spend my 529 money on?
Qualified expenses that 529s cover. A tax-advantaged 529 college savings plan can be used to pay for college, but not all expenses qualify.
When Must 529 funds be withdrawn?
529 plans do not have withdrawal deadlines. A 529 plan account owner is not required to take a distribution when the beneficiary reaches a certain age or within a specified number of years after high school graduation, and funds can remain in the 529 plan account indefinitely.
Can a 529 plan be used to pay for college?
Remember, just because your child decides not to pursue a traditional four-year degree doesn’t mean you can’t use your 529 plan savings. 529 plan funds can be withdrawn tax-free to pay for tuition, fees and other qualified expenses at any eligible post-secondary institution, including vocational or technical schools.
What to do with leftover money from 529 plan?
Transfer the 529 plan funds to another beneficiary One of the great things about 529 plans is that they allow you to change the beneficiary to another qualifying family member without tax consequences. This is a no-brainer if you have another child who will attend college, or want to help pay for niece or nephew’s private K-12 education.
Is there a time limit to use 529 funds?
There is no time limit on using the funds, so if your child has career plans that require a higher level of education, whether it’s another degree or professional courses, you can use it in the future. You can use money in a 529 at any institution of higher education that receives financial aid.
Can a 529 plan have more than one beneficiary?
You can only list a single beneficiary on each 529 plan account, and your life will be so much easier when it comes time to pay for college if the name of the beneficiary matches the child whose bills you are paying. But what if you end up with too much in one account and not enough in the other?
