529 Plans 2026: How to Save for College Tax-Free
529 Plans 2026: How to Save for College Tax-Free College costs $100,000-$300,000+. A 529 plan helps you save tax-free for education expenses. This guide explains how 529 plans work, benefits, and how to choose the best one. What Is a 529 Plan? A tax-advantaged savings account for education expenses. Two types: Education Savings Plan: Invest in mutual funds/ETFs, growth varies with market. Most popular. Prepaid Tuition Plan: Lock in today's tuition rates for future college (limited states). Named after: Section 529 of the Internal Revenue Code. Who can open: Anyone (parent, grandparent, relative, friend). Beneficiary: Child, grandchild, yourself, anyone. Tax Benefits (The Big Draw) Tax-free growth: Investments grow tax-free. Tax-free withdrawals: Withdrawals for qualified education expenses are tax-free (federal + most states). State tax deduction: 30+ states offer deduction/credit for contributions (up to $5,000-$10,000/year). Gift tax: Contribute up to $19,000/year ...