A 529 plan is a tax-advantaged education savings account. Contributions grow tax-free; withdrawals for qualified education expenses (tuition, room and board, books, computers) are tax-free. Two types: Education Savings Plans (most common, invest in mutual funds) and Prepaid Tuition Plans. State tax deductions vary — most states offering them require using the in-state plan. No federal contribution limit, but excessive contributions face gift tax implications ($19K/year/donor 2026 annual exclusion). Up to $10K/year per beneficiary can fund K-12 tuition. Secure Act 2.0 allows rolling $35K of unused 529 to Roth IRA (subject to limits). Account ownership doesn't transfer to beneficiary.
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529 Plan
August 22, 2026 · Aditya Gupta
Personal Finance
Related terms
1099 Form
Form 1099 is a family of IRS forms reporting various types of non-W-2 income. 1099-NEC reports nonemployee compensation…
ABLE Account
Achieving a Better Life Experience (ABLE) accounts are tax-advantaged savings accounts for individuals with disabilities (onset before age…
AGI
Adjusted Gross Income (AGI) is your total gross income minus specific 'above-the-line' adjustments — traditional IRA contributions, student…
APR
Annual Percentage Rate (APR) is the yearly cost of borrowing money expressed as a percentage of the loan…
APY
Annual Percentage Yield (APY) is the effective annual rate of return on a savings or investment product, accounting…
Asset
An asset is anything you own that has economic value — cash, investments, real estate, vehicles, ownership interests…
