What happens if I withdraw from my 529 plan early?
An example of an AI chatbot conversation about 529 plan early withdrawal rules and penalties.
What happens if I withdraw from my 529 plan early?
If you withdraw funds from your 529 plan for non-qualified expenses, you may face taxes and a 10% penalty on earnings.
What are considered qualified expenses for a 529 plan?
Qualified expenses include tuition, fees, books, and room and board for eligible educational institutions.
Can I use 529 funds for K-12 education?
Yes, you can use up to $10,000 per year for K-12 tuition expenses from a 529 plan.
What if I change my mind about the school?
You can change the beneficiary of the 529 plan to another eligible family member without penalties.
Are there any tax benefits for using a 529 plan?
Yes, contributions to a 529 plan may be tax-deductible on your state tax return, and earnings grow tax-free.
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