Before 529 programs became prevalent as an attractive vehicle for funding college education, many families utilized traditional custodial accounts (UTMA or UGMA). A primary benefit of these accounts is that, up to certain limits, any income generated from these accounts is not taxed or only taxed at the child’s tax rate instead of the parent’s
With the estate tax reinstated by the 2010 federal tax law, now may be an opportune time to review estate tax strategies with clients. The current tax rate is in place only until the end of 2012, and after that, estate tax rates could rise. As Congress increasingly focuses on the national debt, rising income
If some of your clients are not among the 10 million 529 plan account holders nationally, it may be a good time to talk to them about changes to the program proposed in Washington, D.C., that could make these plans even more attractive. Clients who are already saving with a 529 plan will also be
Each year, churches, schools, hospitals, and civic groups award scholarships to local students. Helping these organizations establish a 529 account as the funding vehicle can be a great way to build business relationships in your community. Here are some reasons why this can be a better alternative for local non-profit organizations, which will typically hold
Several tax credits for investors saving for college were extended for two years in the passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The contribution limit for the Coverdell Education Savings Account program, which was scheduled to revert to $500, was maintained at $2,000 and extended through 2012. Depending
529 scholarship accounts are a great way to generate business and also create future referral and networking opportunities. Charitable organizations that offer scholarships usually have a dedicated staff member for administrating finances, or may outsource fund management to third-party administrators. The additional costs associated with recordkeeping and program administration may mean that the organization can
Helping a grandchild save for college with a 529 plan may be rewarding for the grandparent as well as the child, especially with estate taxes poised to return in 2011. Grandparents may open a 529 plan as a gift to a grandchild, with the grandparent remaining as the owner of the plan. Grandparents may deposit