Can You Make a Tax-Free 529 Plan Contribution Larger Than the Annual Gift Tax Exclusion?

Although the IRS typically allows people to gift no more than $14,000 a year (2017 figure) to another person without a federal gift tax, you can contribute up to $70,000 to a 529 plan in one year. A special tax law allows you to aggregate five years of the allowable $14,000 annual gift-tax exclusion (5 x $14,000 = $70,000) to jump-start a 529 plan.

While you will not be able to make any further gifts to the 529 plan for …

Am I Locked Into an Investment Option for My 529 Plan?

In the early days of 529 plans, once you selected an investment option within a college savings plan, you could not change that option. Only new contributions could be invested in different investment options.

Under current rules, however, the IRS allows you to change your investment options in a college savings plan once every calendar year.

For more information, see http://www.sec.gov/investor/pubs/intro529.htm.

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