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Can a child fund their own 529?

Can a child fund their own 529?

So, who can contribute to a 529 plan? Just about anyone can make a contribution, either to an account they own or to an account owned by someone else. The beneficiary can be your child, niece or nephew, godchild, grandchild, friend or even yourself.

Can a friend contribute to a 529 plan and claim a tax deduction?

529 plan gifts may be deductible on state income tax returns. Friends and family might consider giving the gift of college instead of traditional holiday and birthday presents. As an added bonus, the gift giver may qualify for a state income tax deduction or credit based on the 529 plan contributions.

Are contributions to a grandchild’s 529 tax deductible?

Yes, grandparents can claim the deduction for contributing to a 529 if they live in one of the 34 states that offer a state income tax deduction for 529 college-savings plan contributions. The only question is whether you must own the account or whether you can contribute to one set up by, say, the child’s parents.

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Can you contribute to a 529 for yourself?

If you are a lifelong learner, you can set up a 529 plan for yourself to pay for your educational pursuits. You get the same tax breaks and benefits as any 529 plan owner. You can fund the account with new money or with unused money from a child’s account.

Who is the legal owner of a 529 account?

Generally, the same person who contributed the money controls the Section 529 account. This doesn’t have to be the case, however. Someone else, such as a grandparent, could make a donation but name the child’s parent as the account owner, or a parent could establish the account and allow others to contribute to it.

Who owns a 529 plan?

All 529 plan accounts have an account owner and a beneficiary, with the account owner controlling the account. An individual 529 account is a regular 529 account, with an adult individual as the account owner and a student as the beneficiary. The account owner makes the investment decisions regarding the 529 account.

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Are contributions to 529 plans subject to gift-tax?

Annual gift tax exclusion One of the many benefits of saving for a child’s future college education with a 529 plan is that contributions are considered gifts for tax purposes. There is no joint gift-tax return, so you and your spouse will each have to file separately.

Can an uncle contribute to a 529 plan?

A gift contribution to a 529 plan is a deposit made by anyone but the account holder. If an aunt, uncle, grandparent or other family member makes a deposit, they are all considered gifts.

Should a grandparent own a 529 plan?

Some financial professionals advise grandparents to contribute to a 529 plan as part of an estate planning strategy. In most cases, you have to consider the Generation Skipping Transfer Tax (GST) when leaving an inheritance to a grandchild.

Can I deduct 529 contributions for my nephew?

All 529 plans accept third-party contributions, regardless of who owns the account. That means anyone, including grandparents, aunts, uncles or even friends can help a child save for college. You do not have to be a family member of the beneficiary to contribute to their 529 plan.

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Can you open a 529 in your own name?

Future parents can open a 529 plan in their own name, listing themselves as the beneficiary, and change the beneficiary to the child after the child is born.

Does a 529 beneficiary need to be a dependent?

For 529 plans, there is an “owner” (usually the parent), and a “beneficiary” (usually the student dependent). The “recipient” of the distribution can be either the owner or the beneficiary depending on who the money was sent to.