Gifts of up to $15,000 per beneficiary will qualify for the annual gift tax exclusion. Most people can make fairly large contributions to a child’s 529 plan without incurring gift taxes. And, there are no fees for this gifting service. You can invite family and friends to a personalized online gifting page where they can contribute money straight from their bank account to a Learning Quest account. It’s easy to set up a crowdfunding page specifically for your child’s college journey through the Learning Quest ® 529 Education Savings Program. What would it look like in the future if you replaced a portion of your usual gift amount with contributions toward college savings? And what if your friends and family did the same? An Easy Way to Crowdfund Your 529 Account The availability of tax or other state benefits (such as financial aid, scholarship funds and protection from creditors) may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors. Most states allow anyone who contributes to a 529 plan to claim the state income tax deduction or credit, while some only offer this benefit to the 529 plan account owner. Plus, as a bonus for the gift givers, they may also qualify for a state income tax deduction or credit for 529 plan contributions. And when you add up these gifts, you’ve got another tool to help you save for college. However, only 20% of parents ask loved ones contribute to their child’s 529 plan instead of giving a material gift, according to a survey from College Savings Foundation.įamily members and friends may already be gifting money for holidays, birthdays and other milestones.
Parents are recognizing that small amounts from lots of people have the potential to grow immensely over time. Putting Birthday Gifts to Better UseĬrowdfunding has gained popularity for a variety of expenses. More than 20 percent of funding for the 2018-19 school year came from parent and student loans, piling on debt for families and young adults, according to a study on How America Pays for College by Sallie Mae and Ipsos. Most families pay for college through a combination of current paychecks, savings, scholarships or grants, and particularly, loans. What Are The Options for Paying for College? College Costs Are Rising…But How Much?Įven considering the price differences between two- and four-year, public and private options, the costs can get overwhelming.
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But it’s time to get realistic about how much you need for your child’s education, the best ways to save, and how to avoid debt down the road. It can be hard to sock away money and put a college savings plan into action when it comes to something that’s years away. You’ve heard it a million times: College costs are skyrocketing.
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