You’re not limited to using money in a 529 to pay for American schools. For example, the plane ride, souvenirs and museum visits don’t qualify. However, not all the costs of studying abroad count as qualified education expenses. If you’re studying abroad in a program sponsored by your university, you can use 529 funds to pay for room, board and tuition costs. That $10,000 figure is a lifetime limit, not an annual one, and applies to both federal and private student loans. But since the SECURE Act of 2019, you can put up to $10,000 from your 529 toward existing student loans. Most assume they can only use the money in a 529 to pay for current college-related expenses. This may include specific adaptive equipment that a student needs to attend class or turn in assignments. Students who need any kind of special needs service can use 529 funds to cover those costs. If your school requires any other equipment, like a webcam or software, you can use 529 funds to pay for those items, too.įor example, if you’re a graphic design major and you need to buy Adobe software to complete a project, you can use your 529. You can buy a laptop or desktop with 529 funds, and you can even use the money to pay for your monthly internet bill. Also, any required class supplies are 529-eligible, such as binders, notebooks, pens and pencils. In other words, you can’t buy unrelated books and expect them to qualify as expenses. Textbooks are qualified expenses, but only books on your class reading list qualify. You can still rent an apartment that costs more, but you’ll have to either pay the difference out of pocket or pay a 10% penalty and income tax on the difference.Ĭontact your school’s financial aid department to find out the room and board allowance and try to stay under that figure so you don’t get hit with the extra tax penalty. Any amount exceeding that figure won’t count as a qualified educational expense. You’re only allowed to spend the amount your college has stated is the average cost of room and board. However, not all of your rent and utilities may be eligible if you live off-campus. Your 529 plan funds can cover most room and board expenses, whether you’re living in a college dorm or an apartment with five of your best friends. You can look up a particular trade or vocational school’s 529 eligibility using Saving For College’s lookup tool. Students who attend trade or vocational schools can also use 529 funds if the school is a Title IV institution. If your child attends private or parochial school, you can use a 529 to pay up to $10,000 a year in tuition. And while some parents think they can only use a 529 to pay for college costs, those funds can also be used to pay for K-12 expenses. The most common way that people use 529 funds is to pay for college tuition and fees. Here are examples of what you can use 529 funds for: Tuition and Fees You can even use funds from a 529 plan to pay for ineligible expenses, but you’ll have to pay some fees at tax time. You can use the money from a 529 plan to pay for eligible education expenses.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |