Simple Cost Sharing Agreement With 529 In Illinois
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Illinois' Bright Start 529 College Savings Plan is one of only three 529 plans in the nation rated Gold by Morningstar. Join us for a conversation with Illinois Treasurer Michael Frerichs and Morningstar analyst Madeline Hume to learn more about what sets this plan apart from its peers.
If you took a 529 savings plan withdrawal last year, you will receive IRS Form 1099-Q. It reports all the payments that have been made from the 529 savings plan, regardless of how they were spent.
Unlike an IRA, contributions to a 529 plan are not deductible and do not have to be reported on federal income tax returns. What's more, the investment earnings in your account are not reportable until the year they are withdrawn. 529 plans save taxpayers billions of dollars on their income taxes.
In each year you take withdrawals from a 529, the plan administrator should issue a Form 1099-Q, which reports the total distribution taken from the account in a given year, the portion of the distribution that came from earnings in the account, and the portion of the distribution that represents the original ...
529 recordkeeping This is why it's important to keep good records (receipts and supporting documentation) that reconcile the total withdrawals that the 1099-Q reports to the IRS with the total that was spent on qualified educational expenses.
This means keeping detailed records that include account statements with tuition and room and board; receipts for computer equipment, accessories, software, and internet; syllabi documenting course requirements (e.g., lab fees); canceled checks and records showing withdrawals for all other qualified education expenses.
Illinois' Bright Start 529 College Savings Plan is one of only three 529 plans in the nation rated Gold by Morningstar. Join us for a conversation with Illinois Treasurer Michael Frerichs and Morningstar analyst Madeline Hume to learn more about what sets this plan apart from its peers.
If an investor opened a tax-deferred 529 account with an initial investment of $2,500 and contributed $100 every month for 18 years, the account could be worth over $6,300 more than with similar contributions into a taxable account.
