Welcome to our second in a series "The Tax Man Cometh". Obviously taxes are a fact of life in living in modern society. We are certain about following the rules and contributing our fair share but intelligence dictates understanding the laws and looking to leverage aspects of the law that will both benefit your situation and potentially decrease the impact of taxes overall.
This particular article focuses on the College 529 Plans that are sponsored by each of the 52 states. It is important to consider particular tax benefits from each state in this regard. Pennsylvania is very liberal in allowing wide latitude in choosing plans and granting tax credits. Other states may not be as generous. Plans may be chosen that offer some level of "affinity" program with credits from purchases, credit card relationships, etc. Sometimes choosing the plan with the least expenses may not be the best choice for your particular situation. It is important to note that College 529 Plans may be opened for anyone and therefore advantages such as gifting, tax deferral and tax exemption for qualified college expenses may be apply.
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