investment for children
What is the best investment for a grandparent to make for a child’s college education. The child is 1 year of age. Is there a tax deduction?
Please read this recent column for details of how to invest in a 529 plan. It’s a great idea!
And if you live in a state that has a state income tax, most plans offer a deduction. For example, in Illinois up to $10,000 of contributions in any one year is eligible for a deduction on state income taxes. There is no deduction on Federal income taxes for contributions to a 529 plan.
If you’re doing estate planning and want to get money “out” of your taxable estate (over $12 million is the tax limit) then you can combine 5 years of the allowable annual $17,000 gift exemption — and set up a giant 529 plan, to be shared by your grandchildren!!