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529 Plan Contribution Limits
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Flashcards
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Rollovers between 529 plans and their tax implications
Tax-free if completed within 60 days and for the same beneficiary or a family member
Maximum aggregate contribution limit for 529 plans
Varies by state, typically ranging from 529,000
529 plan contribution deadline for a tax year
December 31st of the tax year for federal tax purposes; varies for state tax deductions or credits
Tax treatment of 529 plan withdrawals for qualified education expenses
Earnings and withdrawals are tax-free at the federal level and often at the state level
Penalty for non-qualified withdrawals from a 529 plan
10% federal penalty tax on earnings plus income tax on the earnings portion of the withdrawal
529 plan state tax benefits and limits
Varies by state; some offer tax deductions or credits for contributions
Impact of 529 plan contributions on federal financial aid eligibility
Minimal; treated as parental assets in the Expected Family Contribution (EFC) calculation
Gifting strategies to maximize contributions to a 529 plan without triggering tax consequences
5-year superfunding, front-loading contributions using gift tax exclusions
Annual contribution limit for an individual to a 529 plan in 2023
Tax consequences of exceeding annual contribution limits
Potential gift tax liability and reduction in lifetime gift tax exemption
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