You’ve put aside money for college in a 529 account for years. A 529 account — named for a section of the federal tax code — lets people save and invest for college while avoiding taxes. Money is contributed after it’s taxed and grows tax free, and the funds withdrawn are not subject to federal taxes when spent on eligible education expenses. And while there’s no federal tax deduction for contributions to a 529, some states offer tax breaks. To protect the tax advantages and use the money wisely, it makes sense to plan for how and when to spend 529 funds.

Source: New York Times September 04, 2020 12:56 UTC