Grandparents funding 529's

[Bamaman]

Don't forget that 529's are no longer for just college, universities and technical schools.

We as parents and grandparents can fund 529's and take tax deductions for our younger grandchildren's tuition and books in private preschool, elementary and high schools up to $10K.

Our 7 year old Brynley is in the second grade in a first class private school. I'm just thankful her tuition is just $6K yearly versus the $20K my sister's paying for each of three grandsons yearly tuition in the "big city."

 

[foxfirev5]

DW and I have four accounts going for the GK's age 4 mo. to 9 years. As far as I can tell the only deductions I can get are for contributions on my state taxes any given year. The big benefit is the growth of the account for future tax free withdrawals, years down the road. Am I missing something?

 

[rodi]

My dad 'seeded' my sons' 529's... and I inherited them when he passed. Grandparents can be awesome and I'm grateful my dad got his grandkids college funds started (we took over the funding, aggressively, after he passed.)

 

[donheff]

How many of us FIRE type grandparents will be itemizing in coming years? I've itemized for decades but don't see it this year or anytime soon.

 

[athena53]

How many of us FIRE type grandparents will be itemizing in coming years? I've itemized for decades but don't see it this year or anytime soon.

Those of us who are single will! I'm in a LCOLA area but have about $3K in mortgage interest, $4K in property taxes, $5K in state taxes and enough in Medical expenses over 7.5% of AGI (premiums + root canal + dental implant) to hit $12K. I have a pile of charitable deductions that will put me well over that. The increase in the standard deductions is a much bigger benefit for married couples.

 

[donheff]

Those of us who are single will! I'm in a LCOLA area but have about $3K in mortgage interest, $4K in property taxes, $5K in state taxes and enough in Medical expenses over 7.5% of AGI (premiums + root canal + dental implant) to hit $12K. I have a pile of charitable deductions that will put me well over that. The increase in the standard deductions is a much bigger benefit for married couples.

Yes, I am projecting my status. Even more obvious for singles living in high property tax locations where they could be starting out at or near the $10K limit.

 

[Bamaman]

It's those medical expenses that bring in itemization for us. Even on Medicare, things mount up quickly for the 4 of us.

 

[misanman]

We fund 529s for our ten grandchildren, contributing up until they are 14. At this point six of the 10 are 14 or older so we are done with those (whew!). We still have 4 under 14 so we have a few more years to go (youngest is 3). The oldest has used his account for college tuition and one of the youngest may end up using it for private school tuition (TBD).

I have to admit that I may not have started this process if I'd known we were going to have to fund 10 accounts.

 

[calmloki]

Have been funding a couple 529 accounts for non-relatives. When we started I got the kid's SS numbers and just opened the accounts for them. (Chance I lied on one of the application questions). After a few years I transferred ownership of he accounts to the kid's respective parents. dammit. Since then the 529 plan administrators have changed several times. Each time the account numbers change just a bit. When I want to fund one of the accounts the plan administrators won't talk with me or divulge anything on the accounts or even let me contribute without sending in paper forms and checks, which we did a couple years. Last year the forms and checks, in one envelope, vanished. Plan administrators wouldn't divulge whether they had the checks or had received them or if there was some problem - all I could tell was the checks hadn't been cashed in over a month.. After several runs at the 529 plan phone bank I finally found someone willing to go a bit beyond. They set up a three-way call with the parents and I got ACHs set up. They wouldn't inform me when the ACHs took place of course..

This year I was gun shy on sending checks so I contacted the parent sets to have them send me 529 email invitations to contribute to the two accounts. Aaaaand the plan administrators have changed. And it was difficult for them to get newly signed up and transferred to the new plans. Took two weeks to push giving money through the proper channels. Trying real hard to remember that this is to benefit some kids, but #!%%* it shouldn't take this much effort to give money away.

 

[SumDay]

I have to admit that I may not have started this process if I'd known we were going to have to fund 10 accounts.

Ditto - we're doing this for our nieces & nephews, but didn't realize they were going to try to repopulate the earth. We've already given them quite a chunk, so I'm thinking of telling mom and dad that since we retired and are now on a fixed income we're going to have to cease & desist contributions.

 

[kaneohe]

.................

We as parents and grandparents can fund 529's and take tax deductions for our younger grandchildren's tuition and books in private preschool, elementary and high schools up to $10K.

............................

under what part of tax law do you take tax deductions for grandchildren's education costs?

I know you can use 529 funds for that and no tax if used for legitimate education purposes. Is that what you mean?