The cost of tuition and related costs are continuing to rise at a greater pace than the rate of inflation, with Ivy League schools now priced at more than $50,000 per year. Families that want to save for higher education costs on a tax-advantaged basis can look to 529 savings plans. These are state-run programs in which contributions are invested; the funds available for education depend on the amount contributed and how well they are invested. The particulars of the plan vary from state to state.
During the economic turndown, these savings plans, like other Wall Street investments, were very disappointing. Some contributors lost money through their investment in their 529 plan. Now that the stock market has improved, interest in 529 savings plans has also returned. Here are tax rules related to these plans.
Tax Breaks
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