What expenses can a 529 be used for?<\/p>\n
A 529 plan is a popular tax-advantaged savings account specifically designed for education expenses. The funds saved in a 529 plan can be used for a variety of eligible educational expenses. While the primary purpose of these accounts is to fund college expenses, the scope of allowable expenses is broader than many people realize. Here, we will explore the expenses that can be covered by a 529 plan, providing clarity for account holders and potential beneficiaries.<\/p>\n
1. Tuition fees:
\nTuition fees at eligible schools or universities can be paid for using 529 plan funds. This includes undergraduate, graduate, and vocational schools.<\/p>\n
2. Room and board:
\nExpenses related to room and board, both on-campus and off-campus, can be covered by a 529 plan. However, the amount allowed may be restricted to the school’s published cost of attendance.<\/p>\n
3. Textbooks and supplies:
\nThe cost of required textbooks, as well as educational supplies, such as laptops, software, and laboratory equipment, are eligible expenses. However, luxury or non-educational items are not covered.<\/p>\n
4. Internet expenses:
\nIn this digital age, many educational programs require internet access. The cost of internet connectivity, including monthly fees, can be paid for using 529 plan funds.<\/p>\n
5. Special needs assistance:
\nIf a beneficiary has special needs, additional expenses related to education, including tutoring, therapy, or adaptive equipment, can be covered.<\/p>\n
6. Trade or vocational schools:
\n529 plans can be used to cover expenses related to qualified trade or vocational schools, including tuition, fees, books, equipment, and supplies.<\/p>\n
7. K-12 tuition:
\nAs a result of recent changes in tax law, up to $10,000 per year can be withdrawn from a 529 plan to cover qualified K-12 expenses in private and religious schools.<\/p>\n
8. Student loans:
\nSince 2019, 529 plan funds can also be used to repay qualified student loans. Each beneficiary, including siblings, can withdraw up to $10,000 for this purpose.<\/p>\n
9. Study abroad programs:
\nIf the study abroad program is approved for credit at the beneficiary’s school, expenses such as tuition, fees, room, and board can be paid for using 529 funds.<\/p>\n
10. Apprenticeship programs:
\nExpenses related to registered apprenticeship programs that meet the requirements set by the Department of Labor can be covered by a 529 plan.<\/p>\n
11. Computer expenses:
\nAlthough laptops or computers are generally considered a personal expense, they qualify as an eligible expense if required by the institution for attendance.<\/p>\n
12. Transportation:
\nTransportation costs incurred while attending an eligible post-secondary institution, such as commuting expenses or travel for study abroad programs, can be covered by 529 plan funds.<\/p>\n