529 College Savings For Illinois
As our son rapidly approaches the age of two, the scary reality that paying for college tuition is just around the corner. We were fortunate enough to start a 529 College Saving plan for him when he was born and make a diligent effort to add to it on a frequent basis. For those that reside in the state of Illinois I wanted to do a quick rundown of what your options are in the event you want to get a head start on saving for your kids college education. First, let’s take a look at the basics of what a 529 College Savings Plan is.
Quick note: You can use any state 529 plan to help pay for college and you don’t have to reside in that state to use the benefit. Doing so, you will give up a potential state tax benefit.
Basics of 529 College Savings Plan
529 Plans are the most commonly used savings tool for college education nowadays. They are named after Section 529 of the Internal Revenue Code, 529 savings plans provide a tax-advantaged way to save for qualified higher education expenses. These plans are generally sponsored by individual states, while plan assets are professionally managed by independent investment firms or state government agencies. Anyone can open a 529 savings account regardless of income level and contribute up to $13,000 ($26,000 for married couples) a year without gift-tax consequences.
