Form 529 (Education savings)

I "might" be getting an overseas job next year. Too early to say for certain. First $80k is tax free. The employment opportunity pays between $130-$250k based on location.

I asked a tax accountant about putting the tax free amount into a 529 for my children's education expenses. He asked me why I would put tax free money in it, as I should be putting the taxed earnings in the 529 so those earnings don't get taxed.

Huh???

He explained that any money put into a 529 is tax deductible, so I should keep the tax free earnings and put the taxed earnings in the 529. The interest accumulated from the 529 is also tax deductible.

 

I am not trying to double protect my money, I wanted to set up a college savings trust for my kids when the 529 was mentioned. The tax accountant told me to use the tax free money for bills and personal savings and put the taxed income in the 529

 

529 can be used for any educational expense

 

I wasn't asking for advice. I was giving advice.

 

529 Plans: Questions and Answers | Internal Revenue Service