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November, 2009
Remember our Veterans on November 11th GRANDPARENTS GET A BREAK! Eddie Hall, State Farm Agent in Greenville, reminded us of a great benefit for grandparents who contribute to their grandchild’s college fund. One of the ways to do this is the 529 plan that allows you to set aside funds for a grandchild’s college education. To ensure there is no federal income tax taken from the funds upon withdrawal, it has to be used to pay for qualified higher education expenses. Also, free from federal income tax is a program called a Coverdell Education Savings Account. Grandparents, or other contributors, must have an adjusted gross income of less than a certain amount to take advantage of the Coverdell program. The maximum that can be contributed each year is $2,000. These funds remain tax free as long as they are withdrawn to pay for qualified higher education or elementary/secondary educational expenses. This is a great way to make sure the funds are there for your grandchildren to receive the best education possible.
Texas Twister