What Is a 529 Plan in the U.S.? Tax Benefits and How It Works
What Is a 529 Plan in the U.S.? Tax Benefits and How It Works Saving for a child’s college education can be overwhelming — but a 529 plan can make it easier and more tax-efficient. Let’s break down what a 529 plan is, how it works, and why it might be the smartest way to save for future education costs in the U.S. 🎓 What Is a 529 Plan? A 529 plan is a tax-advantaged investment account designed to help families save for education. Sponsored by states or educational institutions Earnings grow tax-free Withdrawals for qualified education expenses are also tax-free 💼 What Can It Be Used For? Qualified education expenses include: College tuition, fees, books, supplies Room and board (if enrolled at least half-time) K-12 tuition (up to $10,000/year) Student loan repayments (up to $10,000 lifetime per beneficiary) Some apprenticeship program costs 💰 Tax Advantages Contributions are not deductible on federal taxes But earnings grow tax-fr...