College Planning

A 529 plan is a tax-advantaged investment vehicle (typically sponsored by states or state agencies) designed to encourage saving for the future education expenses of the plan’s beneficiary. A 529 plan can be used to pay for qualified education expenses at most accredited colleges and universities, as well as tuition expenses at both public and private elementary and secondary schools (K-12). 529 plans can also be used for certain apprenticeship programs or to pay principal or interest on a qualified education loan. There is no cap for qualified college expenses. For K-12 tuition there is an annual cap of $10,000. For apprenticeship programs or loan payments, there is a lifetime cap of $10,000 per beneficiary.

  • Named for section 529 of the Internal Revenue Code
  • Typically sponsored by state or state agency
  • Open to anyone regardless of income level
  • Investments grow tax-deferred
  • Assets are the property of the account owner
  • Qualified withdrawals (withdrawals of funds used for education purposes) are not subject to federal (and some state) income taxes
  • Account owner decides when to withdraw funds, and for what purpose
  • Account owner may change the account’s beneficiary at any time

Not only can you use the 529 plan but also the Prepaid College Tuition plan. Prepaid Plans are designed to work where, how and when you need them. The future is unpredictable, but you can count on your Prepaid Plan whatever your child’s needs might be. There are several different types of education savings accounts that can also be used to save for your child’s future education expenses. The two main education savings account vehicles are Coverdell Education Savings Account and a 529 College Savings Plan. Many individuals also create Uniform Gift to Minors Act (UGMA) custodial accounts and provide funds directly.

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We’re here to help answer your questions. Financial, insurance, and tax matters can be complicated, our experts are on hand to help inform you of every aspect regarding your accounts. We take great pride in using our expertise for you and look forward to hearing from you.

    MLR Financial Company will help you understand your employer benefits. This is our specialty! We assist with your HDHP, FSA 1, FSA 2, and HSA plans.

    High Deductible Health Plan (HDHP) is a plan with a higher deductible than a traditional insurance plan. While the monthly payment is lower, you pay more in healthcare costs before your insurance company starts to pay their share. This plan can be combined with a health savings account (HSA), allowing you to pay for some medical expenses with tax-free money. For more information about this plan, contact us.

    Another option you can choose through your job is a Flexible Spending Account (FAS 1 or FAS 2) to pay for your co-payments, deductibles, drugs, and some other costs. Using this method can reduce your taxes. A FSA account is a special account you put money into to use to pay any out of pocket healthcare costs. You do not have to pay taxes on this money. You will also actually save money equal to the taxes would have set aside. Your employer may make contributions to your FSA, but they are definitely not required to.

    Here’s a few facts about FSAs:

    1. They are limited to $2,650 per year, per employer.
    2. You can use FSA to pay down deductibles and co-payments
    3. You can spend FSA funds on prescription medications.
    4. You can also cover medical equipment, bandages, and more.

    They recommend to use you FSA within the plan year. You can also receive up to 2 extra months of grace period. This can allow you to carry up to $500/per year to use the following year.

    There is always a Health Savings Account (HSA) which allows to you to set aside money on a pre-tax basis to pay for qualified medical expenses. Sometimes this method can help you lower your overall healthcare costs. These funds cannot be used to pay premiums. Of course, you can only contribute to an HSA if you have a High Deductible Health Plan (HDHP). An HSA may also earn interest, which is also not taxable.