What are the benefits of a 529 plan?
An example of an AI chatbot conversation about the benefits of a 529 plan for education savings.
What are the benefits of a 529 plan?
A 529 plan offers tax advantages, flexibility in contributions, and can be used for various education expenses.
Can you explain the tax advantages?
Sure! Contributions to a 529 plan grow tax-deferred, and withdrawals for qualified education expenses are tax-free.
Are there any penalties for using the money for non-education expenses?
Yes, if you withdraw funds for non-qualified expenses, you'll incur income tax on the earnings and a 10% penalty.
Can I use a 529 plan for K-12 education?
Yes, you can use up to $10,000 per year for K-12 tuition expenses from a 529 plan.
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