One of the smartest things we can do for our children is to save for their education. And one of the smartest ways to save for education is through 529 plans like Tomorrow’s Scholar. The reason is simple: 529 plans have the same or better tax advantages as other college savings plans but are much more flexible, with higher contribution maximums, multiple donors and fewer restrictions on how the money is used.
Flexible Contribution Options
- Automatic investing or payroll direct deposit begins as low as $25 a month (with no account minimum)
- Only $250 is required to open an account
- Contribute up to $567,500 for a single beneficiary
- Convenient contribution methods: check, electronic funds transfer, wire, automatic investment, and payroll deduction
- Accepts tax-free rollovers from other 529 plans, Coverdell Savings Plans (formerly Education IRAs) and qualified U.S. savings bonds (series EE and I)
- You can change investments or redeem your funds with a phone call
Anyone Can Contribute—Not Just the Account Owner
- Parents, grandparents, family members and friends can all invest in a child’s education
- No income restrictions on owner or donors
- Residents are not limited to their own state's plan or that of the state the student enrolls in
- You can set up a plan for yourself if you’re thinking of going back to school
- All contributions are eligible for estate and gift tax exclusions
Can Be Used for a Wide Range of Educational Expenses
- Eligible expenses include tuition, fees, books, on- and off-campus room and board, equipment and supplies
- Eligible institutions include two- and four-year colleges, technical, vocational and graduate schools in the U.S. (and even some overseas)
- Overview of Rules and Eligible Expenses
Owner Controls Beneficiary Account
- Unlike other college savings programs, the account owner maintains control of the assets until they are distributed
- If beneficiary does not go to college, or some money remains unused, the account owner can change the beneficiary (There may be a 10% penalty plus taxes)
- Account owner can withdraw or transfer funds at any time (Non-Qualified withdrawals are subject to income-tax plus a 10% IRS penalty)
- Money can be removed from the estate without relinquishing control
- Account can be set up under trust or corporation, or as UGMA/UTMA to reduce taxes on minor and gain favorable tax treatment for financial aid
- Tomorrow's Scholar permits joint ownership of an account