College Savings / 529 Plans
A 529 college savings plan provides the flexibility you want with the tax advantages you need.
It's never too early to begin saving for education expenses. So whether you’re a new parent, grandparent, or planning to attend school yourself, college savings plans can help you spend more of your money on education – not on taxes. Starting early is an important component to successful education planning.
A 529 college saving plan provides a tax-advantaged program to help you keep ahead of skyrocketing education costs. The plan is flexible and affordable, and may offer you tax advantages that you have overlooked. 529 Plan features include:
- Professionally managed investment portfolios, with a variety of investment options and features
- Freedom to invest for a child or adult of any age
- Money may be used at almost any private or public college in the US to pay for tuition, books, housing and other eligible expenses.
- You won’t pay taxes while contributions accumulate
- The account beneficiary can be a child, grandchild, niece, nephew, family friend—even yourself.
- You can start investing with a small amount. Then, when it’s time for college, you decide when and how much to withdraw.
- No limits. Anyone can contribute.
Annual Contribution Limits
- $13,000 per child (single parents)
- $26,000 per child (married couples)
- Note: Higher contributions can be made but will be subject to federal gift tax regulations.
- Federal gift tax regulations allows $65,000/$130,000 per child at one time with no additional contributions for five years.
Income tax treatment
- Earnings can grow tax-deferred, and withdrawals for qualified higher-education expenses are also free from federal income tax.
Your Middleburg Investment Services representative will take the time to understand your situation, identify your education savings goals, and get you started with a 529 plan that will try to meet your needs and your timeline.
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
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