[此贴子已经被作者于2008-6-2 12:32:21编辑过]

[此贴子已经被作者于2008-6-2 12:36:48编辑过]

uh oh， 不小心点的。呵呵。。

9月的精华帖

http://www.huaren.us/dispbbs.asp?BoardID=333&ID=258480&replyID=&skin=1

[此贴子已经被作者于2008-6-2 13:21:31编辑过]

hi amy

hi，嗯嗯

hi， 店长

hi，莲妈

5 rules of 529 plan

NEW YORK (Money Magazine) -- For years, consternation over expiring tax breaks, questionable financial aid treatment and high fees cast a long shadow over 529 plans, the once and future king of college savings accounts

Not anymore. Consider these recent developments:

The alternatives to 529s, meanwhile, are looking grim. Custodial accounts? Sunk by the latest hike in the kiddie tax. Coverdell Education Savings Accounts? An impending drop in contribution limits to just $500 a year will barely allow you to fund your kid's pizza budget.

The upshot: You'd now be a fool to save for college any other way but in a 529 plan.

Faced with such a clear choice, parents (and grandparents) have been pouring money into these plans lately - a record $5.2 billion flowed in during the first quarter of this year alone.

You will certainly need every penny you can sock away. With college costs in recent years climbing at a 6% annual rate, four years of tuition, room and board at a public school will run you $125,000 by 2022; for a private college, you'll need closer to $300,000.

The real question then is not whether to save for college in a 529 account but which one to pick. There are some 85 plans available nationwide, with almost every state offering at least one program and some, like West Virginia, offering as many as five.

The number and quality of the investment choices vary, and some of the plans are a whole lot more expensive to buy and own than others. Depending on where you live and which plan you pick, you might qualify for a state income tax deduction on your contribution.

Then again, the rules governing those write-offs may be changing soon. And many of the plan managers could change over the next few years as well, since some 60% of state contracts with their current 529 providers are set to expire by 2010.

Confusing? Well, yes. But it's nothing you can't handle by adhering to a few simple guidelines.

All 529 savings plans provide the same federal tax benefits: Your investment earnings grow free of income tax. Your withdrawals, as long as you use them to pay higher education bills, are untaxed as well.

What you don't get is an up-front federal tax deduction - think of these accounts as the college saver's counterpart to Roth IRAs.

But 32 states and the District of Columbia have stepped in where the feds have not, offering residents a write-off on state income taxes for at least a portion of their 529 contributions.

And three states - Kansas, Maine and Pennsylvania - even allow residents to deduct their contributions to out-of-state plans as well.

If you live in a high-tax state that offers a big deduction for 529 contributions, your best 529 plan is one in your own backyard - that is, as long as the plan also has reasonable expenses and offers solid investment choices (see rules 2 and 3).

In New York State or Michigan, for example, a married couple filing jointly can write off contributions of up to $10,000 ($5,000 for single taxpayers). And in Colorado, New Mexico, South Carolina and West Virginia, your contributions are fully deductible no matter how much you put in. (To see how much you can save in state taxes, check the calculator at archimedes.com.)

We selected 22 plans as top choices on this basis, in addition to another 5 whose strong management and low fees make them top choices not only for their own state's citizens, but for anyone whose in-state plan doesn't merit a star.

Outside those states your tax break may be modest - or your state may not offer a deduction or even impose an income tax at all. In that case, expand your search to include out-of-state plans.

One caveat: The rules governing state deductions for 529 plans could be changing soon because of a pending Supreme Court case that may bar states from giving tax breaks to their own 529s but not to out-of-state plans. (The case, Davis v. Kentucky, involves the tax treatment of municipal bonds, but 529 plans are likely to fall under the same rules.) A decision isn't expected for several months. But if the court does rule against special tax treatment, states may respond either by allowing residents to deduct contributions to any state's plan or by dropping their write-offs altogether.

For now, however, there's no reason not to grab the tax break for as long as it may be available