Education Saving Plans
Updated: January 7, 2009
If you are saving for a child`s or grandchild`s education but are confused about the best way to go.
Below are some tips on the 529 and U.T.M.A. accounts.
UTMA or Uniform Transer to Minors Act
-Use for any purpose benefiting child.
-Can give up to $12,000 per year per child.
-Under 14 years old - First $850 tax free.
-Over 14 years old - Earnings taxed at child`s rate.
U.T.M.A. or Uniform Transfer to Minors Act
-Use for any purpose benefiting child.
-Can give up to $12,000 per year per child.
-Under 14 years of age - First $850 tax free.
-Over 14 years of age - Earnings taxed at child`s rate.
-At majority its the child`s money.
529 College Savings Plan
-Can only be used for education.
-Can contribute up to $12,000 per year per child.
-Earnings grow free from federal income tax.
-Owner maintains control of assets.
-Can only be used for education.
-Can contribute up to $12,000 per year per child.
-Earnings grow free from federal income tax.
-Owner maintains control of assets.
-Can change beneficiaries.
