Simple Cost Sharing Agreement With 529 In Washington
Description
Form popularity
FAQ
If you receive a letter or are audited by the IRS, it may be because the IRS did not receive a Form 1098-T, Tuition Statement PDF, verifying the student's enrollment or we need additional information to support the amounts of qualified expenses you reported on Form 8863 PDF.
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.
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.
We recommend that Washington residents use the DreamAhead 529 plan due to the low fees and plan investment options. We recommend that out-of-state residents utilize other plans.
Lastly, although the IRS can audit a student's return to verify that 529 plan earnings distributions were properly excluded from income, they don't seem to do this very often.
Thanks to a recent legislative update and the new “529 grandparent loophole,” grandparents who own a 529 account can make significant contributions to their grandchild's education savings without necessarily affecting the grandchild's eligibility for federal student aid.
Judged purely on the size of the deductions or credits, the most generous states appear to be Colorado, Illinois, Mississippi, Nebraska, New Mexico, Oklahoma, Pennsylvania, South Carolina, Virginia, and West Virginia.
There are no state tax benefits in the state of Washington. Are contributions federal tax deductible? No, contributions to a 529 plan are not deductible on your federal taxes.
We recommend that Washington residents use the DreamAhead 529 plan due to the low fees and plan investment options. We recommend that out-of-state residents utilize other plans.
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.
