What are tax-advantaged accounts for college savings?

What are tax-advantaged accounts for college savings?

Tax-advantaged accounts for college savings include 529 plans and Coverdell Education Savings Accounts (ESAs). They offer tax benefits to help you save for education expenses.

How do 529 plans work?

529 plans allow you to save money for college with tax-free growth and tax-free withdrawals for qualified education expenses.

Are there any contribution limits for these accounts?

Yes, 529 plans have high contribution limits, often exceeding $300,000, but specific limits can vary by state.

Can I use the funds for expenses other than tuition?

Yes, 529 funds can be used for tuition, room and board, books, and other qualified education expenses.

What happens if my child doesn't go to college?

If your child doesn't go to college, you can change the beneficiary to another family member or withdraw the funds, but you may incur taxes and penalties.